< Back to Search

Final Rule: Review and Adjustment Requirements for Child Support Orders Effective October 13, 1993

AT-92-12

Published: December 28, 1992
Information About:
State/Local Child Support Agencies
Topics:
Case Management, Review and Modification
Types:
Policy, Action Transmittals (AT), Regulations

ACTION TRANSMITTAL

OCSE-AT-92-12

December 28, 1992

TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT:Final Rule - Review and Adjustment Requirements for Child Support Orders Effective October 13, 1993

ATTACHMENT:Attached is a final rule, published in the Federal Register on December 28, 1992 (57 FR 61559) that implements the requirements of section 103(c) of the Family Support Act of 1988 (P.L. 100-485) codified at 42 USC õ666(a)(10)(B) and (C) which are effective October 13, 1993. Section 103(c) requires periodic review of child support orders and adjustment, as appropriate, in accordance with State guidelines for support award amounts. These regulations implement the requirement that States have a process under which child support orders in IV-D cases are, with certain exceptions, periodically reviewed not later than 36 months after the establishment of the order or the most recent review, and adjusted, as appropriate, in accordance with State guidelines. These regulations also implement the requirement that States notify each parent subject to a child support order in the State, being enforced under Title IV-D, of the right to request a review of the order. Final rules implementing review and adjustment requirements which were effective October 13, 1990 were published July 10, 1992 (57 FR 30658).

REGULATION REFERENCE: 45 CFR Parts 302 and 303

SUPERSEDED MATERIAL:OCSE-AT-90-07, dated August 17, 1990

EFFECTIVE DATE:October 13, 1993

INQUIRIES:ACF Regional Administrators

Allie Page Matthews

Deputy Director

Office of Child Support

Enforcement

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 302 and 303

RIN 0970-AA91

Child Support Enforcement Program: Review and

Adjustment of Child Support Orders

AGENCY: Office of Child Support Enforcement (OCSE), ACF, HHS

ACTION: Final rule

SUMMARY: These regulations implement the requirements of section 103(c) of the Family Support Act of 1988 (Pub. L. 100-485) which are effective October 13, 1993. Section 103(c) requires periodic review of child support orders and adjustment, as appropriate, in accordance with State guidelines for support award amounts. These regulations implement the requirement that States have a process under which child support orders in IV-D cases are periodically reviewed not later than 36 months after the establishment of the order or the most recent review, and adjusted, as appropriate, in accordance with State guidelines. These regulations also implement the requirement that States notify each parent subject to a child support order in the State, being enforced under Title IV-D, of the right to request a review of the order. Final rules implementing certain other requirements of section 103(c) which were effective October 13, 1990 were published separately (57 FR 30658, dated July 10, 1992).

EFFECTIVE DATE: These regulations are effective on and after October 13, 1993.

FOR FURTHER INFORMATION CONTACT: Marianne Clifford Upton, OCSE

Division of Policy and Planning, (202) 401-5373

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

This regulation contains no information collection requirements that are subject to OMB review under the Paperwork Reduction Act of 1980 (Pub. L. 96-511).

Statutory Authority

These regulations are published under the authority of section 466(a)(10) of the Social Security Act (the Act), as amended by Public Law 100-485 and the general authority of section 1102 of the Act, which requires the Secretary to publish regulations that may be necessary for the efficient administration of the functions for which he is responsible under the Act.

Background

Review and Adjustment of Child Support Orders

Historically, State laws governing modification of child support orders have required that the party seeking a change in the award amount must prove that a material change in circumstances has occurred since entry of the order. Several States require that the change in circumstances be substantial and continuing. Still others impose a condition that the change be one that could not have been contemplated at the time the order was initially established. Meeting this burden of proof has often made obtaining a change in the amount of child support a difficult undertaking for many parties. The existence of such a standard has frequently meant the need for an adversary proceeding and protracted litigation to demonstrate the occurrence of a sufficient change in circumstances or to resist an allegation that the requisite change in circumstances has occurred.

Section 103 of the Family Support Act of 1988 (Pub. L. 100-485) requires that States must use guidelines as a rebuttable presumption in all proceedings for the award of child support and that review and adjustment of child support orders be done "in accordance with guidelines." These provisions evidence Congressional intent to make obtaining an adjustment in the amount of child support easier by requiring a process in which the standard for modification must be related to State child support guidelines. The enactment of these requirements reflects a recognition that the traditional burden of proof for making a change in the amount of support ordered may have contributed to many awards remaining unchanged throughout the life of the order and thus, inadequate or inappropriate with the passage of time. It also signals a need for States to at least expand, if not replace, the traditional "change in circumstances" test as the legal prerequisite for changing the amount of child support to be paid, by making State guidelines the presumptively correct amount of support to be paid.

Beginning with the enactment of the Child Support Enforcement Amendments of 1984 (Pub. L. 98-378), each State had to establish guidelines for child support award amounts in the State, as a condition of State IV-D plan approval. These guidelines were not binding, but had to be made available to all judges and other officials with authority to determine award amounts.

Under section 103(a) of Public Law 100-485, Congress required that States must use guidelines and that the amount of the child support award computed according to the guidelines is rebuttably presumed to be the correct amount to be awarded. A written finding or specific finding on the record of the support proceeding that the application of the guidelines would be unjust or inappropriate in a particular case, as determined by State criteria, is sufficient to rebut the presumption in that case.

To ensure that the use of the guidelines will result in appropriate support award amounts, section 103(b) of Public Law 100-485 requires that States review guidelines at least once every four years.

Final regulations governing these aspects of section 103 were published in the Federal Register on May 15, 1991 (56 FR 22335).

In response to comments, OCSE stressed that the use of guidelines is not limited to setting the initial award, and that guidelines must be used to modify existing orders.

The challenge of keeping child support orders up-to-date has emerged as an issue of concern for legislators, policymakers, IV-D personnel, the judiciary, child advocates, and parents.

Analysis done by the HHS Office of the Inspector General (OIG) suggests that States and AFDC recipients would benefit substantially if State IV-D agencies reviewed child support orders of $50 per month or less in cases in which the State and/or Federal wage data indicates that the absent parent's income is more than $10,000 per year (see OIA-05-87-00035). This study also suggests that non-AFDC families would benefit substantially if State IV-D agencies determined the income of absent parents from State and/or Federal wage data in non-AFDC cases with low child support orders and informed custodial parents how a modification might affect the amount of support awarded.

Child support orders established prior to the adoption of State guidelines may be grossly inadequate. Even the use of guidelines in establishing the initial award amount does not ensure that orders, over time, continue to meet the support standards set by the guidelines. To address this problem, section 103(c) of Public Law 100-485 phases-in a requirement for the periodic adjustment of support orders, in accordance with the support guidelines in the State.

Under section 103(c), the Act is amended by inserting a new section 466(a)(10). Section 466(a)(10)(A), effective October 13, 1990, requires State procedures for review and adjustment of orders, consistent with a plan indicating how and when child support orders are to be reviewed and adjusted. Review may take place at the request of either parent subject to the order or at the request of a State IV-D agency. Any adjustment to the award must be in accordance with the State's guidelines, which must be used as a rebuttable presumption in establishing or adjusting support obligations in the State.

Section 466(a)(10)(B), effective October 13, 1993 (or earlier at State option), requires the State to have implemented a process

whereby orders being enforced under title IV-D will be reviewed no later than 36 months after establishment of the order or the most recent review of the order and adjusted in accordance with

the State's guidelines for support award amounts. Review is

required in IV-D cases in which support rights are assigned to the State, unless the State has determined that review would not be in the best interests of the child and neither parent has requested a review. This encompasses child support orders in cases in which benefits under the AFDC, Title IV-E foster care, or Medicaid programs are currently being provided. It does not include orders in former AFDC, Title IV-E foster care, or Medicaid cases, even if the State retains an assignment of support rights to the extent of any unpaid support that accrued under the assignment which remains due to the State after assistance terminates. In IV-D cases in which there is no current assignment of support rights to the State, including former recipients of AFDC, Title IV-E foster care, or Medicaid benefits receiving continued IV-D services, review is required at least once every 36 months only if a parent requests it. In all IV-D cases, if such a review indicates that adjustment of the support amount is appropriate, the State must proceed to adjust the award accordingly.

Section 466(a)(10)(C) requires States to have procedures

for notifying each parent subject to an order in effect in the

State, being enforced under title IV-D, of their rights

concerning reviews and proposed adjustments. Each parent must

be notified of the right to request the State to review the

order; of any review, at least 30 days before it commences; and

of a proposed adjustment or determination that there should be no change in the award amount. In the latter case, the parent must be given at least 30 days after notification to initiate

proceedings to challenge the proposed adjustment or

determination.

Proposed regulations governing all section 103(c) requirements

were published in the Federal Register on August 15, 1990 (55 FR 33414). Final rules implementing only those review and adjustment requirements which are effective October 13, 1990

were published on July 10, 1992 (57 FR 30658). Section 303.8(a) of the final rule published earlier contains definitions designed to clarify key aspects of the review and adjustment process. Under õ303.8(a)(1)(i), "adjustment" means an upward or downward change in the amount of child support based upon an application of the State guidelines for setting and adjusting child support. Under õ303.8(a)(1)(ii), "adjustment" also means the provision for the health care needs of the child through health insurance or other means.

Section 303.8(a)(2) defines "parent" to include any custodial parent or noncustodial parent (or for purposes of requesting a review, any other person or entity who may have standing to request an adjustment to the child support order.) "Review" is defined in õ303.8(a)(3) as an objective evaluation, conducted through a proceeding before a court, quasi-judicial process, or administrative body or agency, of information necessary for application of the State's guidelines for support to determine theappropriate support award amount, and the need for a provision in the order addressing the child(ren)'s health care needs through health insurance or other means under State guidelines.

Section 303.8(b) of the final rule published earlier requires the State to have a written and publicly available plan indicating how and when child support orders in effect in the State will be periodically reviewed and adjusted. It also specifies the requirements that the State must meet between October 13, 1990 and October 12, 1993, with respect to orders being enforced in IV-D cases.

In accordance with section 103(e) of Public Law 100-485, OCSE

conducted two-year demonstration projects in Colorado, Delaware, Florida, and Illinois to test and evaluate model procedures for reviewing child support award amounts. Project findings corroborated that many child support orders are inadequate,

outdated, and not reflective of parental ability to pay. At the

conclusion of the projects, adjusted orders had been obtained

in over 3,200 cases across the four projects. These cases represented 10 percent of those initially selected for review. [Another 17 percent were pending at the conclusion of the demonstration projects.] The vast majority (87%) of the modifications were upward adjustments in the child support award. The average percentage increase in the monthly support obligation ranged from 47 percent in Delaware to 135 percent in Illinois. Across the four projects, the average percentage increase was 92 percent.

We urge interested parties to examine the findings of these demonstration projects, as well as the results of a similar project initiated earlier in Oregon, to determine innovative methods for conducting review and adjustment processes on an ongoing basis. States may find the practical experiences and various approaches of other jurisdictions beneficial in implementing the review and adjustment requirements. To this end, OCSE will continue to broadly disseminate reports of the experiences of the demonstration States and best practices of other jurisdictions as they integrate review and adjustment into their routine support enforcement program operations.

In response to numerous comments urging us to delay publication of final regulations until completion of the demonstration projects mentioned previously, we decided to publish this separate rule governing the requirements for review and adjustment which are effective October 13, 1993. This action has enabled us to benefit from the experience and wisdom gained from the review and adjustment demonstration projects.

Description of Regulatory Provisions

Required State Laws -- Section 302.70

With the issuance of the final rule with respect to the review

and adjustment requirements which are effective October 13, 1990, regulations at 45 CFR 302.70(a)(10) require that States enact necessary laws and have procedures in effect for the review and adjustment of support orders, in accordance with the requirements of 45 CFR 303.8. We amend õ302.70(a)(10) to specify the requirements for review and adjustment by the respective effective dates. Current õ302.70(a)(10) is redesignated as paragraph (a)(10)(i) to require that States enact laws and implement procedures for review and adjustment of child support orders in accordance with õ303.8(a) and (b) effective on October 13, 1990 until October 12, 1993. Paragraph (a)(10)(ii) requires States to enact laws and implement procedures for review and adjustment of child support orders in accordance with õ303.8(a) and (c) through (f), effective on October 13, 1993, or earlier at State option.

Provision of Services in Interstate Cases -- Section 303.7

This final rule amends õ303.7(b) and (c) to add review and adjustment activities to the required functions to be performed by initiating and responding States in interstate IV-D cases.

Paragraph (b) is amended by adding new subparagraph (6) which requires an initiating State to send a request for review of a child support order to another State within 20 calendar days of determining that review of a child support order should be requested in such other State and receipt of information necessary for conducting the review, in accordance with õ303.8(f)(1). We add a new subparagraph (v) to õ303.7(c)(7) to include review and adjustment of child support orders upon request, in accordance with õ303.8(f)(2), to the services a IV-D agency in a responding State must provide if necessary in interstate IV-D cases. We amend paragraph (c)(8) to replace the term "modification" with the term "adjustment" to make the terminology of the regulation consistent with the language of P.L. 100-485. Section 303.8(f) of this regulation sets forth specific requirements for review and adjustment in interstate cases. We address and clarify these interstate review and adjustment responsibilities in greater detail under the section of this preamble which explains õ303.8(f) of the regulation.

Review and Adjustment of Orders -- Section 303.8

Section 303.8(c) -- Periodic Review and Adjustment After October 13, 1993

Section 303.8(c) contains the requirements that are effective October 13, 1993, or earlier at State option, regarding review of child support orders being enforced under the IV-D program. Beginning at that time, under paragraph (c)(1), the State must have in effect and use a process for review and adjustment of child support orders in effect in the State, including a process for challenging any proposed adjustment or other determination. The review and adjustment process may be conducted within a State's judicial arena, within an administrative process structure available within an executive agency, within a combination of the judicial and administrative systems, or within any other designated forum at the discretion of the State. The law does not mandate that the IV-D agency substitute for or assume the functions of a court or administrative forum which has the legal authority in the State to adjust child support orders. Alternatively, nothing in the law precludes a State, if it so chooses, from extending such authority to the IV-D agency.

Notice of the Right to Request Review

Paragraph (c)(2) requires that the State must notify each parent subject to a child support order in the State being enforced under Title IV-D of the right to request a review of the order. It further requires that the parents be notified of the appropriate place and manner in which the request for review should be made. States may meet this requirement by sending a one-time notice to each parent subject to an order in the State.

This requirement applies in all cases in which there is a valid order in effect, which can be adjusted under State law, including orders entered as a result of interstate activity, such as those obtained or registered in the State through the Uniform Reciprocal Enforcement of Support Act (URESA) or the Revised Uniform Reciprocal Enforcement of Support Act (RURESA). We recognize that a URESA order is a separate order which stands on its own merit. Such order may be additional to a divorce decree or other order for support, and may be in a different amount than such other orders. On the other hand, in some cases, a URESA order may be the only order in effect. This requirement recognizes that in some instances, there may be orders in effect and being enforced in more than one State. As a result, it is possible that the parents involved in such cases may receive multiple notices from different States regarding the right to request a review of the order. The responsibilities of initiating and responding States for requesting and conducting reviews and adjusting child support award amounts in interstate cases are discussed in greater detail later in this preamble.

The duty to send a notice of the right to request a review does not, however, extend to those cases in which a State, acting in a responding capacity, has registered or entered an order for enforcement purposes only and, under State law, cannot modify the underlying child support award amount. In these cases, the State is providing only enforcement services such as income withholding or State income tax refund offset, and the State's jurisdiction over the parties is limited to the specific purpose of enforcement.

Periodic Publicizing of Right to Request Review

Paragraph (c)(3) requires States to periodically publicize the right to request a review as part of its support enforcement services as required under õ302.30 and to include notice of this right as part of the information on IV-D services required under õ303.2(a)(2). Thus, States must regularly and frequently publicize information about the availability of review and adjustment services, as well as all other support enforcement services, through public service announcements. States could, for instance, incorporate appropriate information about review and adjustment of child support orders in any pertinent notices to child support recipients and obligors or use other media such as brochures, pamphlets, radio, television, posters, and billboards. Additionally, States could sponsor advertising campaigns or utilize public service announcements to inform parents of the right to request review of child support orders.

Frequency and Conditions of Reviews

Paragraph (c)(4) specifies the frequency and conditions under which child support orders in effect in the State and being enforced under Title IV-D must be reviewed. With certain exceptions, States must review, at 36-month intervals after establishment of the order or the most recent review, child support orders in IV-D cases in which rights to child support are assigned to the State. In IV-D cases in which there is no assignment of support rights to the State, reviews are required only upon the request of either parent.

Although the statute requires periodic reviews only in cases in which rights to child support are assigned to the State under section 402(a)(26) of the Act (i.e., AFDC cases), we are using our authority under section 1102 of the Act to publish regulations that are necessary for the efficient administration of the IV-D program to require such reviews in all IV-D cases in which support rights are assigned to the State. This includes, in addition to cases assigned as a condition of receipt of AFDC under 45 CFR 232.11, title IV-E foster care cases in which the support rights are assigned under section 471(a)(17) of the Act and non-AFDC Medicaid cases in which the rights to medical support or to payments for medical care from any third party are assigned under 42 CFR 433.146. In any non-AFDC Medicaid case in which the support order does not provide for the health care needs of the children or the custodial parent does not have satisfactory health insurance other than Medicaid, a review is required to determine the need to provide in the order for the health care needs of the children, through health insurance or other means.

Regulations implementing the requirement for extension of IV-D services to non-AFDC Medicaid recipients and continuation of

IV-D services to former AFDC recipients were published in the

Federal Register on February 26, 1991 (56 FR 7988). IV-D

services include those unrelated to securing medical support

under õõ303.30 and 303.31, unless the non-AFDC Medicaid

recipient notifies the IV-D agency that child support enforcement services unrelated to securing medical support are not wanted.

Individuals who have assigned medical support rights must

cooperate with the IV-D agency in establishing paternity and in

securing medical support, unless the Medicaid agency determines

that good cause for not cooperating exists. Other than the fact that medical support rights are assigned and a duty to cooperate with the IV-D agency in establishing paternity and securing

medical support exists, a non-AFDC Medicaid case is similar to a non-AFDC case. Therefore, if a support order requiring the

provision of health insurance or otherwise addressing the health care needs of the children already exists in a non-AFDC Medicaid case, a review of the child support order is not required every 36 months unless a parent requests a review.

For the purpose of review and adjustment requirements, former AFDC cases which continue to receive IV-D services are considered to be non-AFDC cases, such that review is not required in such cases unless requested by either parent. Similarly, cases in which the State, by virtue of a previous assignment of rights to child support, is entitled to arrearages, but in which continued services are no longer being provided to the former recipient, are not subject to the mandatory review requirement.

These requirements are discussed more extensively in the Response to Comments section of this preamble.

Exceptions to Mandatory Review

Paragraph (c)(4) also sets forth three exceptions to the mandatory review requirement. First, under paragraph (c)(4)(i), review is not required in cases in which support rights are assigned to the State, as defined at õ301.1, if the State determines, in accordance with õ303.8(c)(5), that a review would not be in the best interests of the child and neither parent has requested a review.

Paragraph (c)(4)(ii) specifies the second exception, by

providing that review is not required in IV-D cases, in which there is no assignment of support rights to the State, if

neither parent requests a review.

Lastly, paragraph (c)(4)(iii) exempts from mandatory review any IV-D case in which medical support rights are assigned under 42 CFR 433.146, but in which child support rights are not assigned under 45 CFR 232.11 or section 471(a)(17) of the Act, the order requires the provision of health insurance, and neither parent has requested a review. Recipients of Medicaid are required under section 1912(a)(1) of the Act to assign to the State their rights to support for medical care from any third party and to cooperate with the State in establishing paternity and securing medical support. Effective July 1, 1988, section 9142 of Public Law 100-203 amended section 454(4) of the Act to require that State IV-D agencies provide IV-D services to families who have assigned their rights under section 1912 of the Act as a condition of receipt of Medicaid. The IV-D agency must provide all appropriate IV-D services to Medicaid recipients referred to the IV-D agency, whether or not they are also eligible for AFDC, without an application or application fee.

Circumstances Under Which Review Would Not Be in the Best Interests of the Child

Paragraph (c)(5) provides that, in cases in which support rights are assigned to the State as defined in õ301.1, a State must determine that a review of the child support order would not be in the best interests of a child if there has been a finding of good cause as set forth at 45 CFR 302.31(c) and 45 CFR 232.40 through 232.49 or 42 CFR 433.147(c) and the State or local IV-A, XIX, or IV-E agency has determined that support enforcement may not proceed without risk of harm to the child or caretaker relative.

Section 466(a)(10)(B)(i) provides that the State's

determination regarding whether a review would not be in the

best interests of the child must be in accordance with

regulations of the Secretary. In the proposed rule, we requested input from commenters as to how to best define "not in the best interests of the child." These regulations reflect our decision,

in consideration of many insightful comments, to limit the "not in the best interests of the child" exception to mandatory reviews to cases in which good cause for not cooperating has been determined to exist. Since the statute specifies that the regulations of the Secretary dictate the State's determinations in this regard, States may not establish or use other criteria for determining that a review would not be in the best interests of the child.

Under section 466(a)(10)(B)(i), a review is not required in any case in which an assignment of support rights is in effect, if the State has determined that such a review would "not be in the best interests of the child and neither parent has requested review." This creates a two-prong test, both conditions of which must be satisfied to meet the exception to the requirement that a review be conducted. Even if it is determined that good cause exists, a request by a parent would require a review. This could result in requests from absent parents in cases in which good cause for not cooperating exists and in which the IV-D agency is therefore not pursuing support. However, we believe this to be a remote possibility because õ303.11(b)(10) permits States to close cases in which there has been a finding of good cause as set forth at õõ302.31(c) and 45 CFR 232.40 through 232.49 and the State or local IV-A or IV-E agency has determined that support enforcement may not proceed without risk of harm to the child or

caretaker relative.

Pre-Review Notice

Paragraph (c)(6) contains the requirements for notifying each parent subject to a child support order in effect in the

State in advance of any review. Under paragraph (c)(6)(i), States must notify each parent of any review at least 30 calendar days before commencement of the review.

The requirement that States provide advance notice prior

to conducting a review is applicable in all IV-D cases,

regardless of whether the State is proceeding with a mandatory

review or whether the review was requested by a parent. Notices

must be issued to both parties, including the requesting party.

The purpose of the notice is to advise the parties that a review will be conducted. We strongly encourage that the language in

the notice be "reader-friendly": i.e., clear and easy to understand. The notice can serve as a vehicle for requesting information from the parties, explaining the steps in the process, and advising of the date, time, and location of hearings, if any. The notice can be tailored to fit the particular State circumstances. If State due process or other rules established for the review process allow, the notice requirement may be satisfied by sending a copy of the petition, motion, or administrative notice to each party, provided that any hearing on such pleading not occur until 30 calendar days following the mailing or service of the notice. This requirement is further explained in the Response to Comments section of this preamble.

Information Requirements

Under paragraph (c)(6)(ii), States must notify each parent of any information necessary to conduct the review and the date by which such information must be provided. States are encouraged to incorporate both aspects of this requirement in the notice issued 30 calendar days in advance of a review. This requirement to provide information was included as authority for States to advise parties of the types of information needed to conduct the review, such as wage statements, income tax returns, health insurance coverage verification, financial affidavits, completed guideline worksheets, or other documents. Any information necessary for computing the child support obligation using State guidelines should be listed and the parties urged to submit any additional facts or documents they wish to have considered during the review process. If a State's statute or procedures which specify guideline computation requirements permit the imputing of income to a party (as a way of dealing with either a lack of necessary financial information to calculate the support amount or situations of voluntary underemployment or unemployment), States are encouraged to advise parties in the notice that failure to provide the specified information may result in imputing income to that party for purposes of determining the amount or entry of an adjusted order.

States are also encouraged to consider requiring that

parties, in all cases or perhaps only certain categories of cases, furnish on a routine basis, financial information directly pertinent to the application of State guidelines to either the court or administrative agency which entered the child support order or which will be conducting any review. States may wish to consider adopting legislation which requires any party to a child support order to file, with the court or administrative agency which entered the order, on a regular basis, a financial statement relevant to the guidelines. For example, at least one State requires, by statute, any absent parent to complete, at the request of the IV-D agency, a statement under oath, providing specified information. Under this law, such information includes, but is not limited to, the absent parent's monthly income, his or her total income for the previous year, the number and name of his or her dependents and the amount of support he or she provides to each, the nature and extent of his or her assets, and such other information as requested. Under this State's law, at the agency's request, such statements must be completed annually. Failure to comply is considered to be a class A misdemeanor.

As part of its guideline, another State specifies that "a party to a child support proceeding shall exchange relevant information on finances or dependents every 3 years, and shall be encouraged to update a support order voluntarily using the updated information and the guideline." Adoption of similar laws or practices may helpeliminate the necessity of having to first file a modification petition in order to conduct any discovery activities. As several commenters noted, until an action is pending before a court or administrative forum, proceedings to obtain information and other evidence cannot be initiated.

Post-Review Notice and Challenge

Paragraph (c)(7) specifies the requirements for providing notices

following any review. Under paragraph (c)(7), following any review, the State must notify each parent subject to a child support order in effect in the State of: (i) a proposed adjustment or a determination that there should be no change in the order and (ii) each parent's right to initiate proceedings to challenge the proposed adjustment or determination, not less than 30 calendar days after the notice.

The post-review notice serves to inform the parties of the

findings and decision of the reviewer, whether such review is conducted by a court, through a quasi-judicial process, or by an administrative body or agency. Depending upon how a State establishes its review process, the post-review notice can take the form of a standardized letter issued by the IV-D agency indicating the review findings, a judicial order, a recommendation of a mediator or referee, an administrative finding, or other document reflecting the results of the review.

Each State has discretion and flexibility in determining how the proposed adjustment or determination not to adjust the order may be challenged by a party. The only statutory requirement is that the State provide the parties at least 30 calendar days to initiate proceedings to challenge the determination. In the four demonstration projects, if an adjustment of the child support award amount was indicated as a result of the review, all four States initiated the adjustment process in conjunction with the notification of the review results. As a result, there was considerable overlap between completion of the review process which included a response to the challenges received and the initiation of the process to adjust the order.

All four projects informed the parents in the notification of review of the opportunity to challenge or contest the result indicated by the review. All four projects had specific time periods within which a challenge must be received and established procedures for responding to challenges made. Although each of the States' procedures varied, the most commonly used approach to a challenge was to review any new or additional information provided by the parent and recompute the amount of child support using guidelines. The parties were notified of the redetermination and asked to stipulate to entry of an order reflecting the findings of the review. As a rule, none of the demonstration States conducted more than two reviews before referring a case for legal action. We believe that arrangements similar to those used in the demonstration States which allow for a reexamination or additional review upon challenge and allow an opportunity to present evidence to the judicial or administrative authority which ultimately decides whether to adjust or not adjust the order satisfy the intent of the Congress that an opportunity to challenge thefindings be provided.

In any State which establishes its review and adjustment process entirely within a judicial arena, with court staff conducting the reviews, the post-review notice requirement may be fulfilled by permitting the parties to challenge the court's decision through appeal. We believe that the availability of an appeal satisfies the statutory right to challenge the adjustment or determination and meets the intent of Congress that parties have an opportunity to challenge a decision. In a judicial setting, hearings provide an opportunity for parties to present evidence and make objections prior to entry of the ruling. Generally, the ruling of the court is considered final, except for purposes of appeal, on the date the order is signed by the judge, unless a subsequent judgment must be filed. Upon entry of the order, the appeal period begins to run. In most States, the time to appeal ends 30 calendar days after entry of the order. The appeal right affords a party the opportunity to have a higher court examine the decision to determine whether error or an abuse of discretion occurred.

Adjustments to Child Support Orders

Paragraph (c)(8) requires that following any review, the State must adjust the order, or determine that there should be no adjustment, as appropriate, in accordance with the State's guidelines for setting support awards and paragraph (d), which addresses the basis for petitioning for an adjustment. This would also include determinations which indicate the need to provide for the health care needs of the children, through health insurance or other means, in the order. Further discussion of the adjustment phase of the process follows in our discussion of paragraph (d) concerning the basis for petitioning for adjustment and later in the Response to Comments section of this preamble.

Basis for Seeking Adjustment -- Section 303.8(d)

Section 303.8(d) specifies the requirements States must meet

with respect to seeking adjustments to child support orders in IV-D cases. Paragraph (d)(1) requires that inconsistency between the existent child support order amount and the amount of child support which results from application of the State guidelines must be an adequate basis, under State law, for petitioning for an adjustment of an order in a IV-D case, regardless of whether or not the order was established using guidelines.

Two exceptions to this requirement are set forth in subparagraphs (d)(1)(i) and (ii). The first exception is allowed if the inconsistency does not meet a reasonable quantitative standard established by the State, as permitted under subparagraph (d)(2). Paragraph (d)(2) provides that States may establish a quantitative standard based upon either a fixed dollar amount or percentage, or both. This quantitative standard, or threshold, is to be used as a basis for determining whether the inconsistency is sufficient to justify proceeding with a petition or motion for adjustment of an award, not as a criterion for deciding whether to review. Threshold standards are not mandatory if States adjust all orders regardless of the degree of inconsistency with the guidelines. However, thresholds may serve to prevent inundating the adjustment process with cases in which the variance in amount between the current order and the amount an application of guidelines would require is minimal. The reasonable quantitative standard and change in circumstances topics are further discussed and explained in the Response to Comments section of this preamble.

The quantitative standard contemplated by õ303.8(d)(2) should be used as a post-review decision-making tool. It should not be considered a restriction on the requirement that the court or administrative process must use guidelines in setting and modifying support or a limitation on the authority of the court or other authority to find, in a particular case, that an award based on guidelines is unfair or inappropriate. In making any adjustment to the amount of support, the judicial or administrative process must apply the State guidelines and, pursuant to õ302.56(f), the child support award calculated to be due under the guidelines is rebuttably presumed to be the correct amount of support to be paid.

Under subparagraph (d)(1)(ii), a second exception to the requirement that an inconsistency between the current amount of support and the amount of support resulting from application of the guidelines is permitted. This exception is allowed if the

basis for the inconsistency is the fact that the amount of the current child support award resulted from a rebuttal of the guideline amount and there has not been a change in the circumstances which resulted in rebuttal of the guideline amount at the time the current order was established. This exception recognizes the existence of cases in which the amount of childsupport was initially established using guidelines, but the court or administrative authority determined that the amount presumed to be correct was unfair or inappropriate, and set an amount which varies from the guideline amount. Consequently, reapplication of guidelines in such cases may always reflect inconsistency simply because the amount of the current support award was established as a rebuttal of the guideline amount.

In these cases, the petitioner would have to show a change in the circumstances which resulted in the original rebuttal of the guideline amount.

Need for Provision for Health Care Needs

Paragraph (d)(3) requires that if the review indicates the need to provide for the health care needs of the children in the order, through health insurance coverage or other means, such need must constitute adequate justification under State law to petition for adjustment of the order to provide for the health care needs of the children, regardless of whether an adjustment in the amount of child support ordered is necessary. It further

stipulates that in no event shall the eligibility for or receipt of Medicaid be considered to meet the need to provide for the child's health care needs in the order.

This provision effectively requires that the review process must include a determination of whether the health care needs of the children are being met, other than through Medicaid, either through health insurance coverage available to the custodial parent, health insurance coverage available to the absent parent, or other means. Even if adjustment of the child support award amount is not sought, the need to provide for the health care needs of the children must be a sufficient reason to seek adjustment of the order. As defined in õ303.8(a), "review" includes a determination of the need to provide for the child's health care needs in the order through health insurance coverage or other means. "Adjustment" means "provision for the child's health care needs, through health insurance coverage or other means."

Providing for the health care needs of children is an integral part of the general obligation that parents have to support their children. Ensuring that children have available medical care is essential to their general welfare. Private insurance provided by parents to cover their children who are eligible for Medicaid assistance also reduces the public costs of supporting a child and results in significant cost savings or cost avoidance to the government under the Medicaid program.

As part of the final regulations published on May 15, 1991 (56 FR 22335) governing presumptive guidelines, State guidelines are required, under õ302.56(c)(3) to take into consideration the child(ren)'s health care needs. As we stated in response to comments on that rule, States have flexibility to determine how their guidelines will provide for the health care needs of the children as long as the requirements of õ302.56(c)(3) are met. Since guidelines must in some way address the children's health care needs, any review of the child support order using guidelines would, by necessity, include a determination of the children's health care needs. Similarly, since any adjustment to the child support order resulting from a review must be in accordance with guidelines, the health care needs of the children must be taken into consideration as part of the application of the guidelines. Furthermore, regulations governing securing and enforcing medical support at õ303.31(b)(2) require IV-D agencies to petition thecourt or administrative authority to include health insurance that is available to the absent parent at reasonable cost in new and modified court or administrative orders, unless the custodial parent and children have satisfactory health insurance other than Medicaid.

Timeframes for Review and Adjustment--Section 303.8(e)

Section 303.8(e) specifies the timeframes for review and adjustment activities. Paragraph (e)(1) requires that in any case in which support rights are assigned to the State under õ301.1, the State must determine, within 15 calendar days of October 13, 1993, or the date the child support order is 36 months old, whichever date occurs later, whether a review should be conducted, as required under õ303.8(c)(4). Subsequent determinations about whether to conduct a review must be made in accordance with paragraph (c)(4), at 36-month intervals based upon the date the child support order was adjusted or the date an order was entered determining that the child support order should not be adjusted, or, in any case in which a petition or motion for adjustment was not filed following a review, the date upon which the post-review challenge period ended. Paragraph (e)(2) requires that within 15 calendar days of receipt of a request for a review, the State must determine whether a review should be conducted, as required under õ303.8(c)(4).

Paragraph (e)(3) specifies that within 180 calendar days of determining that a review should be conducted, or locating the non-requesting parent, if necessary, whichever occurs later, the State must perform four required activities. The State has 180 calendar days to: (1) send the notice or serve process required under paragraph (c)(6) that a review will be conducted; (2) conduct the review of the order; (3) send the notice required under paragraph (c)(7); and (4) adjust the order, or determine that the order should not be adjusted, in accordance with paragraph (c)(8).

To ensure that States are subject to timeframes for conducting review and adjustment activities, the proposed rule proposed to add a reference to modification in the timeframes for establishing an order under õ303.4(d), which was added by final regulations establishing standards for program operations, including timeframes for processing cases, published August 4, 1989 (54 FR 32284). As proposed, the addition of modification to õ303.4(d) would have required States to modify an order for support or complete service of process necessary to commence proceedings to modify a support order within 90 calendar days of locating an absent parent.

However, as a result of comments received regarding this proposal, as well as the findings of the demonstration projects regarding the average span of time involved from case selection through disposition, we have carefully reconsidered the proposed timeframe requirement. We believe that the timeframe should be measured from the date an order is determined to be eligible for review based on its age or the date of a request, allow for a reasonable period to determine whether a review is required, take into consideration the statutory pre- and post-review notice requirements, and accommodate the variations among State legal structures with respect to how child support orders can be legally adjusted.

The findings of the demonstration projects substantiate that a 180-calendar-day timeframe is both necessary and reasonable. The time for completing the review and adjustment process experienced in the demonstration States was measured from case selection as the starting point. Location of the non-requesting parent was not a criteria for selection, but a post-selection, pre-review activity. Thus, time devoted to location was a component of the processing times used to compute the average length of time the review and adjustment process encompasses. The 180-calendar-day timeframe imposed by these regulations does not commence to run until the non-requesting parent is located or determination to review is made, whichever is later. Further discussion of these requirements and the rationale for establishing the 15-calendar-day and 180-calendar-day timeframes is presented in the Response to Comments section of this preamble.

Interstate Requirements--Section 303.8(f)

Section 303.8(f) designates the requirements for conducting review and adjustment activities across State lines. The inherent complications in enforcing and establishing child

support orders when parties live in different States or move from

the State in which the original order was entered are no less

difficult when review and adjustment of orders is added to the

configuration. We are equally mindful of the complexities in

reviewing cases with multiple orders in different amounts as a

result of intervening URESAs or modified registered orders, in

determining the effect of an adjustment made by one State on

other orders in existence in other States, and in improving

communications about cases among States.

The National Conference of Commissioners on Uniform State Laws

(NCCUSL) is currently redrafting URESA/RURESA and will address

review and adjustment of orders in interstate cases in the

revised act. The Commission on Interstate Child Support,

established by section 126 of Public Law 100-485, is gathering

public input on possible reform and improvement to the

interstate system, as well as working closely with the NCCUSL on

the redraft of URESA. The work of both the NCCUSL and the Interstate Commission is scheduled for completion in 1992. These bodies are scrutinizing the complex legal, jurisdictional, and operational issues involved in review and adjustment of child support orders in interstate cases. OCSE is involved in, and will follow, developments as a result of these groups' efforts, in anticipation that answers and guidance on the many interstate concerns will emerge.

However, in order to provide States essential guidance as they begin to review and adjust child support orders under the new requirements, we believe that Federal rulemaking is necessary at this time to clarify the roles and responsibilities of initiating and responding States in performing review and adjustment activities in interstate cases.

Initiating State Responsibilities

Paragraph (f)(1) specifies the responsibilities of an

initiating State with respect to review and adjustment requirements. Paragraph (f)(1)(i) requires that the State in which there is an assignment of rights to child support, as defined under õ301.1, must, in any case in which support rights are assigned to the State under õ301.1, determine within 15 calendar days of October 13, 1993, or the date the child support order is 36 months old, whichever date occurs later, whether a review should be conducted, as required under õ303.8(c)(4) and in which State a review and adjustment will be sought. As stated previously, this requirement encompasses orders in cases currently receiving benefits through the AFDC, title IV-E foster care, or Medicaid programs, and does not apply to cases involving former recipients of public assistance or cases in which the State retains an assignment of support rights to the extent of any unpaid support that accrued under the assignment which remains due to the State after assistance terminates.

Subsequent determinations about whether to conduct a review must be made in accordance with paragraph (c)(4), at 36-month intervals based upon the date the child support order was adjusted or the date an order was entered determining that the child support order should not be adjusted, or, in any case in which a petition or motion for adjustment was not filed following a review, the date upon which the post-review challenge period ended.

We use our regulatory authority under Section 1102 of the Act to require that States must also request review every 36 months in any case in which support rights are assigned to the State but where an order for child support was entered in another State. In meeting this requirement, States are governed by the requirements of õõ303.7(b)(7) and 303.8(f)(1), applicable to initiating States. This places responsibility upon the State to review or request that another State review the child support order in all cases in which support rights are assigned to the State, as defined by õ301.1. Again, this would not encompass

IV-D cases involving former recipients of AFDC, title IV-E foster care benefits, or Medicaid, or cases in which the State retains an assignment of support rights, after public assistance has ceased to be provided, to the extent of any unpaid support remaining due to the State under such assignment.

Paragraph (f)(1)(ii) requires that the State in which a request for review is made, must, within 15 calendar days of a request for a review, determine whether a review should be conducted, as required under õ303.8(c)(4) and in which State a review and adjustment will be sought.

The State in which a request for review is made or in which

there is an assignment of support rights is required to determinewhether a review should be conducted and if so, in which State

the review should take place or be requested. The factors which States must evaluate in making a decision as to whether a review must be conducted are governed by õ303.8(c)(4) which specifies the conditions under which a review is not required. For example, a review is not required in a case in which there is an assignment of support rights to the State and the State determines that a review would not be in the best interests of the child and neither parent has requested a review. The factors which States might evaluate in making a decision as to the suitable forum for conducting the review and making any appropriate adjustment to the child support order include the location of existing order(s), the present residence of each party, and jurisdiction over the parties.

Paragraph (f)(1)(iii) provides that if the State determines under paragraph (f)(1)(i) or paragraph (f)(1)(ii) that it should review a child support order in effect in the State, it must provide notice, conduct a review, and adjust the order, or determine that the order should not be adjusted, in accordance with paragraphs (c)(6) through (8), and complete these activities within the 180 calendar day timeframe in paragraph (e)(2). If the initiating State has an order which can be reviewed locally, even if one or both of the parties is no longer a resident, the case does not become an interstate case for review and adjustment purposes, and the provisions of õõ303.8(c) through (e) govern the review process. We believe this is the most efficient and preferred approach, as it prevents the establishment of multiple orders in various jurisdictions.

However, the initiating State may determine that it is more appropriate to request that a review be conducted in another State because there is an order in such other State that can be adjusted. In these instances, the provisions of paragraph (f)(1)(iv) would apply.

Paragraph (f)(1)(iv) requires that if the State determines under paragraph (f)(1)(i) or paragraph (f)(1)(ii) to request a review of an order in another State, it must send a request for review to that State within 20 calendar days of receipt of sufficient information to conduct the review and provide that State with sufficient information to act on the request. Under this provision, the initiating State must transmit a case to the State it determines is an appropriate place for a review, indicating on the standardized interstate transmittal form that a review is requested and attaching documents necessary to permit review in the responding State.

The current requirements of õõ303.7(b)(3) and (4) governing

providing sufficient, accurate information for the responding

State to act on the request, and providing any additional

information requested by the responding State also apply to

requests for review.

Paragraph (f)(1)(v) specifies the requirements for transmitting

requests for review to other States. If the request for review

is the first contact between the initiating and responding

States in the case, the request for review must be sent to the

interstate central registry in the responding State. However,

if the initiating State has previously referred the case to

a responding State for action, the initiating State may

request a review of the order (if it can be modified under the

responding State's law) by sending the request for review

directly to the local office or agency working the case, rather

than routing the request as a new action through the interstate

central registry of the responding State.

Paragraph (f)(vi) requires the initiating State to send, to the parent in the initiating State, a copy of any notice issued by a responding State in connection with the review and adjustment of an order, within 5 working days of receipt of such notice by the initiating State.

Responding State Responsibilities

Paragraph (f)(2) details the responsibilities of a responding State in response to receipt of a request for a review from another State. Paragraph (f)(2)(i) requires that, within 15 calendar days of receipt of a referral from another State requesting review of an order in effect in the responding State, the appropriate processing agency in the responding State must determine whether a review should be conducted, in accordance with õ303.8(c)(4) and the responding State's procedures for review and adjustment of child support orders. We have included a 15-calendar-day timeframe for the responding State in order to address requests for review of orders that are less than 36 months old. The determination of whether or not to conduct a review in such situations is governed by the responding State's

procedures for review and adjustment of child support orders. This affords the responding State an opportunity to examine the case to determine whether the child support order should be reviewed using as a basis the requirement that reviews must be conducted at 36-month intervals after the establishment of the order or the most recent review. It also makes clear that the decision of whether a review should be conducted is made by the appropriate processing agency, rather than by the central registry. Therefore, the 15 calendar days begin to run upon receipt of the request from the central registry. However, in no event, should a responding State make a good cause determination not to review an order based on the best interests of the child, if the initiating State has requested a review. The determination that good cause not to review an order exists in any case in which there is an assignment of support rights to the State shall be made only by the State to which such assignment of rights to support has been made.

Paragraph (f)(2)(ii) requires that within 180 calendar days of determining that a review should be conducted or locating the non-requesting parent, whichever occurs later, the responding

State must send the notice to each parent that a review will be

conducted, conduct a review, send the notice of the proposed adjustment or determination that there should be no adjustment, and adjust the order or determine that the order should not be adjusted, in accordance with paragraphs (c)(6) through (8).

Although we devote a separate section of this final regulation to interstate processing of required and requested reviews, the

determination of whether a case should be reviewed, the

processing steps, and timeframes are identical to those

applicable in an intrastate case. Once the case is received in

the responsible local office, the procedures involved in

conducting the review should be no different than those used in

intrastate cases. A State may not establish a separate process

for handling requests for review from other States. If the

information received is inadequate, the provisions of

õ303.7(c)(4)(ii) require the responding State to notify the IV-Dagency in the initiating State of the necessary corrections or

additions to the interstate form or documentation. As provided

under õ303.7(c)(4)(iii), if the documentation received with a

case is inadequate and cannot be remedied by the responding IV-D agency without the assistance of the initiating State, the IV-D

agency must process the interstate IV-D case to the extent

possible pending necessary action by the initiating State.

Under paragraph (f)(2)(iii), States may meet the notice requirement of õ303.7(c)(8) by sending notice of the

review required under õ303.8(c)(6) to the parent in the

initiating State through the IV-D agency in the initiating State.

Thus, a responding State would not have to prepare and issue

two different notices contemplated by the mutual existence of the

requirement under õ303.8(c)(6)(i) that advance notice of any

review be sent to each parent and the requirement under

õ303.7(c)(8) that the responding State IV-D agency provide timely

notice to the IV-D agency in the initiating State in advance of

any formal hearings which may result in the establishment or

modification of an order. This requirement effectively permits the advance notice of review to the parent in the initiating State to also serve as the notice to the initiating State itself, by requiring that the notice be transmitted to the parent through the initiating State IV-D agency. As explained previously, õ303.8(f)(1)(vi) requires the initiating State to forward any notices, to the parent in the initiating State, within 5 working days of receipt of the notice from the responding State.

Paragraph (f)(3) specifies that the applicable laws and

procedures for review and adjustment of child support orders,

including the State guidelines for setting child support awards,

established pursuant to õ302.56, are those of the State in which

the review and adjustment, or determination that there be no

adjustment, take place.

Response to Comments

In response to the Notice of Proposed Rulemaking published August 15, 1990, in the Federal Register (55 FR 33414), we received comments from over 70 commenters, representing national organizations, State and local IV-D agencies, advocacy groups, and private citizens. The comments concerning the 1993 requirements and our responses are as follows:

Periodic Review and Adjustment After October 13, 1993--Section 303.8(c)

1. Comment: Numerous commenters questioned what duties are placed by the Act on the State IV-D agency. Can only a IV-D agency conduct review or can other State entities such as the court system?

Response: While nothing in the Act requires the IV-D agency to

be the entity responsible for the review and adjustment of

orders, nothing prevents the IV-D agency from doing so or from

playing an integral role. We retain flexibility in the regulations to allow States to allocate the various review and adjustment functions according to historical practice or to the exercise of State discretion. We recognize the possible distinction between the State and the IV-D agency. Notwithstanding this flexibility to develop a workable process in the State, the IV-D agency retains overall responsibility for ensuring that the requirements are met. Placement of certain review and adjustment functions within other organizational entities or branches of government in no way diminishes the responsibility of the IV-D agency to ensure that, overall, the State is in compliance with all Federal requirements.

Because the Act refrains from specifying which State entity is

required to conduct the review and adjustment process, "review"

is broadly defined in õ303.8(a) to encompass many possible

alternatives. Because these regulations do not necessarily place responsibility on the State IV-D agency to conduct reviews and

make adjustments, a State has the discretion and the flexibility to design a review process that will be effective within or as a complement to its respective child support enforcement program. For example, under one possible model, States which use administrative processes for the establishment of child support awards, which allow for fair hearings and rights of appeal, may find it feasible to use such procedures for the review and adjustment process.

2. Comment: One commenter warned that unless constitutionally-sound State legislation provides for administrative modification of judicial orders, it will be necessary in an administrative

process State for a judicial or quasi-judicial decision-maker to conduct reviews in cases in which the existent order was

established through a judicial process.

Response: We encourage States to consider the various options

available for implementing an effective mechanism for conducting reviews of child support orders. In some States, the preferred

forum may be the State judicial system. In States which

designate that review and adjustment be done entirely by the same entity which entered the initial order, the review and adjustment activities of the State IV-D agency may be limited to filing the action, issuing the notices of the right to request review, and facilitating the exchange of information.

As indicated previously, we urge States to examine the work of the States which conducted demonstration projects. These projects illustrate that various approaches for reviewing and adjusting orders are feasible. In all of the demonstration projects, the review was a fairly simple and straightforward task once the necessary financial information was obtained. Reviews were conducted by computing a new support amount based on the application of the child support guidelines and the required financial information. In Colorado, modification technicians conducted the reviews. In Delaware, mediators or masters conducted reviews if mediation was used; if stipulations were used, child support specialists conducted the reviews. Child support case analysts were responsible for the reviews in Florida, while in Illinois, reviews were conducted by modification unit staff members. If adjustments to orders were appropriate, the demonstration project States varied somewhat in how the adjustments were sought. For example, Colorado used an expedited judicial process: if the IV-D agency could not obtain a stipulation, cases were heard before court referees or commissioners; if either party disagreed with the referee's decision, cases were referred to a judge. Delaware used an expedited quasi-judicial process with family court mediators conducting mediation sessions to obtain stipulations. If stipulations could not be obtained, cases were referred for a hearing before a court master. Any party disagreeing with the master's ruling could request a de novo hearing before a judge. In Florida, IV-D staff attempted to obtain stipulations prior to legal referral; hearings were conducted by either a hearing officer or a judge. Illinois employed dual judicial and administrative processes for establishing orders. However, the use of the administrative process was limited to cases not previously or currently under the court's jurisdiction.

Oregon used an administrative process for establishing child

support orders where no court order for child support existed.

If a court order was subsequently established, as in a divorce

action, the administrative order was superseded. Alternatively, if a court order already existed when a case acquired IV-D status, no administrative order was established. Because Oregon enforced both administratively and judicially established orders, modifying these orders had to proceed through the appropriate

process. The Final Report on the Oregon Child Support Updating

Project (February 1991) explains that the project was able to

test the relative efficacy of using an administrative and a

judicial process to modify support orders. According to the

report, modification of orders through the judicial process did not take significantly longer than those modified through the administrative process. The report emphasized, however, that this result may have occurred because the project was able to arrange expedited docketing and priority calendaring for court hearings. The report further noted that the advantages of an administrative process were more evident with respect to the costs of modifying orders. The report cited data that the comparative cost per case to modify child support orders was considerably lower for administrative modification ($496 per case) than for judicial modification ($770 per case).

Role of the IV-D Agency

1. Comment: Many commenters offered opinions concerning the

conflicts of interest discussion in the preamble to the proposed

rule. In that document we presented our position that the

IV-D agency does not provide legal services per se. Several

commenters explained the difficulties and dilemmas often encountered because of various, and often contradictory, rulings and interpretations of the role of the IV-D program and staff in their jurisdiction in relation to the individuals receiving IV-D services.

Response: The issue of "legal representation" of parties in child support proceedings is a matter to be determined by State law, regulations, or bar association requirements. There are no Federal statutory or regulatory requirements addressing this matter. The IV-D agency, on the other hand, must perform certain functions in accordance with Federal statutory and regulatory requirements. As required under õ303.20(f), States must have staff to achieve the standards for an effective program which must include attorneys or prosecutors to represent the agency in court or administrative proceedings with respect to the establishment and enforcement of orders of paternity and support.

Generally, conflicts of interest should not arise, but if they do exist, the State must resolve the conflict and still perform the requisite functions.

Clearly, Congress has mandated that each party to a child support order in effect in the State and being enforced through the

IV-D program has a right to request a review of that order. In

addition, if appropriate, the State must adjust the order, in

accordance with State guidelines for setting child support award amounts. However, this does not mean that the IV-D agency or its

attorneys must "represent" the parties in the process of conducting a review and/or adjusting the order. The State's role is not to advocate either an increase or a reduction in the amount of the order, but rather, to facilitate whatever adjustment is appropriate in accordance with the guidelines.

We are aware that some States have developed processes through which the review is conducted by the IV-D agency. Following the review, any adjustments are made through the judicial or administrative process in place in the State for setting child support orders, without any necessity of "representation" of either party by the IV-D agency in an advocacy capacity. Several States are exploring pro se procedures for enabling the parties to have better and easier access to the judicial or administrative process to obtain an adjustment.

It is our understanding that a number of States, through legislation and bar association opinions, have taken the positionthat neither the custodial parent nor the non-custodial parent is the "client" of the IV-D program or the attorneys who work for the IV-D program. Additionally, we are aware that several States are making statutory, regulatory, and procedural changes to clarify or redefine the IV-D agency's relationship with the parties in IV-D cases. Some of the efforts States are taking to address these concerns include: removing references to the parent or child as "clients" in all statutes, regulations, policies, forms, and legal pleadings; captioning all legal pleadings relating to the delivery of IV-D services for establishment and enforcement of child support in the name of the State and clearly specifying that the IV-D attorney is not the attorney for either of the parents; and notifying both parents, in writing, that the IV-D agency or its attorneys do not represent either parent and that either parent may obtain private counsel.

2. Comment: Several commenters stressed the need to recognize that in some States the IV-D agency cannot initiate proceedings to reduce child support obligations due to an inherent conflict of interests that would apparently exist in those States because of their administrative structure. They cited ethical problems which would arise for a IV-D attorney in seeking results on behalf of one party in a case which are directly contrary to the interests of another party in the same case for whom the attorney has previously provided services.

Response: Because the statute does not differentiate between the parties with respect to the right to request a review, each parent is entitled to make a request. Consequently, it is conceivable that a review may be requested by an absent parent for the purpose of obtaining a reduction in the amount of child support previously ordered. As indicated by several commenters, in the IV-D context, the issue of client representation has not been universally resolved. As previously indicated, a growing number of State bar associations, attorneys general, or legislatures have issued opinions or statutory interpretations providing guidance to practitioners.

For those cases which were not terminated from the review process, the number of downward adjustments in the demonstration projects was very low. In only 170 cases, representing five percent of the total modifications obtained, did a lower support award amount result. Of these 170 cases, 150 (88 percent) occurred in Colorado and Delaware. Only six downward modifications occurred in Florida, and in Illinois, only 14 of the approximately 1400 orders modified resulted in a reduction in the amount of child support. While Delaware had the largest number of downward adjustments (82 orders representing 10.7 percent), Delaware also had 19 cases in which a downward adjustment was indicated, but the obligor agreed to no change. Delaware also had 139 cases in which the modification disposition was "no change." The earlier project in Oregon reflected that overall, 81 percent of the adjusted orders were forincreases in the monthly support obligation and 19 percent produced decreases in the monthly obligation. Moreover, in Oregon, downward adjustments tended to be situations in which the original order had been entered by default, with income imputed to the obligor. In these instances, the subsequent availability of information as to the obligor's income produced a lower support order. These reported data illustrate that an expected high volume of downward adjustments did not materialize. The results reflect that the impact of downward adjustments was minimal.

Making the review and adjustment process more accessible does not imply that it must be the responsibility of the IV-D agency to directly operate the process or to initiate all petitions for adjustment. It is, of course, permissible and for simplicity, may be desirable, for the IV-D agency to perform these functions in States which do not perceive that there are conflict of interests problems. Within a review process, a IV-D agency may be able to seek voluntary agreements consenting to an adjustment, without taking an advocacy role. Such agreements could be ratified and given legal effect through the judicial, quasi-judicial, administrative, or other designated process in which reviews are conducted. If a stipulation for an adjustment to the order cannot be reached, the case could be submitted to the designated judicial or administrative process for a hearing on the merits of whether an adjustment is appropriate.

It is also permissible under the statute and this regulation for States to allocate the required functions within the review and adjustment process among various entities (courts, administrative hearing officers, IV-D agency staff, etc.). Thus, the potential for perceived conflicts of interest arising in some States if the

IV-D agency is required to seek downward adjustments on behalf of parties in cases in which it previously represented the interests of the other party in the same case may be reduced or avoided by careful and clear designation of these functions to another entity. However, should a State establish a process outside of the IV-D agency, it is imperative that the IV-D agency remain ultimately responsible for ensuring that all Federal requirements under the Act and regulations are satisfied.

3. Comment: Several commenters contended that even if there is no attorney-client relationship with either party, and the IV-D agency is considered the client of the IV-D attorney, the interests of the agency in reducing AFDC dependency, promoting economic self-sufficiency of families, and seeing that children are adequately supported may be compromised if the IV-D agency or its agents advocate for or represent individuals seeking downward adjustments.

Response: Providing an avenue or opportunity for parties to a child support order to access the court for the purpose of updating or changing a child support obligation does not mean that the State places itself in an advocacy role with respect to the interests ofeither party, and does not create an

attorney-client relationship between the IV-D agency and either

party. As aptly stated by one commenter, if States are unbiased in the application of child support guidelines, then they should

proceed with a review in all eligible cases regardless of the

nature of the request or the anticipated outcome. In some cases, a downward adjustment may even be advantageous to the child if it results in an amount of support which can be paid fully, regularly, and timely by the obligor.

4. Comment: One commenter noted that an implied attorney/client relationship can arise if the custodial parent reasonably believes that one exists based upon the conduct of the attorney and communications between the IV-D attorney and the agency.

Response: Although many States have and will continue to make efforts to resolve any problems in this area, we are mindful of and acknowledge the concern raised by commenters concerning

the posture a State IV-D agency or its attorneys and other

staff may have taken previously in the case or perceptions and beliefs the parties may have regarding the IV-D agency/attorney's role. Furthermore, we recognize that even in States which have made it clear that no attorney-client relationship is created by virtue of the application for or delivery of IV-D services, rules governing the legal profession may dictate ethical responsibilities and certain duties of disclosure on the part of attorneys dealing with "unrepresented persons." However, these are matters which State law and individuals bound by such

professional rules of conduct must address at the State level, and not issues governed by Federal law and regulations on the

IV-D program.

We encourage States to enact legislation or obtain an Attorney General opinion that specifically identifies who the IV-D agency and its attorneys represent. It may also be helpful for States to include an explicit statement on the IV-D application or referral form that provision of IV-D services does not constitute or create an attorney-client relationship between either party and the State IV-D agency or its employees or agents. Such a statement could also specify that IV-D attorneys are bound by and will follow State and Federal rules and policy. The interests of the applicant or recipient of IV-D services, although important, do not prescribe the IV-D attorney's activities as they might in a private attorney-client relationship.

5. Comment: One commenter questioned whether an application for IV-D services is required in situations in which the party making the request for a review is not the named recipient of IV-D services.

Response: If the case is currently receiving services through

the IV-D program, a separate or additional application for IV-D

services under õ302.33 is not necessary even if the individual

requesting a review is not the original applicant. The statute

requires that notice of the right to request a review be provided

to both parties, not just the individual who applied for services

through the IV-D program. The statute specifies that non-custodial parents in IV-D cases are entitled to notice of the right to request a review of the child support order and the

right to request a review by virtue of being a party to a

IV-D case. Although there is no requirement to do so, a State may, at its option, take applications for services and required fees from non-custodial parents in existent IV-D cases. However, if a IV-D agency is asked to conduct a review in a non-IV-D case, the requesting party must apply for services and pay the fee before IV-D services may be provided. Certainly, a review and adjustment process may be generally available in the State, independent of the IV-D program, to any party seeking an adjustment.

Pro Se Processes

1. Comment: Several commenters responded to the preamble discussion in the proposed rule regarding establishing pro se processes. One commenter suggested that pro se be used for cases seeking review sooner than they would otherwise be eligible on the 36-month cycle.

Response: We encourage States to establish simple procedures that do not unduly burden a party seeking a review and adjustment of a child support order. States may find it useful to develop pro se procedures and/or establish means to provide legal services in cases in which an adjustment is sought. Pro se was suggested as a mechanism for improving access to the legal process (judicial or administrative) to parties seeking a change in a child support order without the necessity of retaining legal counsel. For example, if a review is requested sooner than the interval for conducting mandatory reviews, a State may suggest pro se or other alternative routes to the individual seeking the review. The suggested use of pro se procedures is not intended as a way for States to avoid their statutory responsibilities for responding to requests for review from either party to a child support order, but a way to reduce the expense and time for the

parties and the State wherever appropriate.

Several States have successfully implemented such a pro se process. In Michigan, forms and instructions are available through the Friend of the Court to enable parties to file their own actions. New Hampshire has developed a "do it yourself" modification kit which is available to any party upon request, and which offers another option if review through the State review plan is not possible or not elected. In September 1991,

OCSE published, through its contract with the American Bar Association Center on Children and the Law, a monograph, "Developing Effective Procedures for Pro Se Modification of Child Support Awards" which examines selected State practices and policy issues in developing a successful pro se modification program. In order to enable parties to accomplish their legal objectives through self-representation, pro se processes may contemplate that the State, courts, IV-D agency, or other sources make copies of guideline worksheets and charts, rebuttal criteria, and other explanations publicly available in order for the parties to effectively proceed pro se.

Notice of the Right to Request Review -- Sections 303.8(c)(2) and (3)

1. Comment: Several questions were raised by commenters concerning the effective dates of the notice requirements.

Response: The effective date for the notification of the right to request review is October 13, 1993, or such earlier date as the State may select. In response to many questions received concerning this notice requirement, OCSE issued a letter to State IV-D Directors on November 28, 1990 clarifying this requirement.

As specified in the final rules published earlier which govern the review and adjustment requirements which are effective October 13, 1990, the pre-review and post-review notices are required in any case in which a review is conducted under the State's plan specifying how and when child support orders in

IV-D cases are to be reviewed.

2. Comment: A number of commenters inquired as to alternatives for meeting the requirement for notifying each parent subject to an order in effect in the State being enforced through the IV-D

program of the right to request a review.

Response: Paragraph (c)(2) specifies that this requirement may

be met by sending a one-time notice to each parent in a IV-D case in which there is a child support order in the State. Such

notices could also be incorporated in any informational materials presented to the parties at the time the order is originally

entered. Some court clerks routinely distribute instructions to parties, which could be expanded to include information about the right to request review. Adding a specific review clause in

every child support order at the time of establishment or

adjustment is another alternative for satisfying this notice

requirement with respect to new cases. This requirement

affords States flexibility in creating mechanisms for notifying

each parent of the right to request review, provided that the

methods selected are reasonably calculated to provide the

necessary notification of both the right to request review and

how and where to exercise this right.

3. Comment: One commenter inquired whether a newspaper

advertisement about the availability of reviews would satisfy

this mandate.

Response: Although there is no requirement for proof of actual

receipt, section 466(a)(10)(C)(ii) of the Act contemplates that

the notice be issued in a manner reasonably calculated to reach

the intended recipients, as it directs that notice be given to

"each parent." Therefore, placing an advertisement in a

newspaper of general circulation will not, in itself, suffice to meet this requirement, as it is conceivable that not all parents who should receive the required notice will receive it.

Certainly, States may consider advertisement as a means of

complying with paragraph (c)(3), which requires the State to

periodically publicize the right to request a review as part of

its support enforcement services as required under õ302.30 and to include notice of this right as part of the information on IV-D

services required under õ303.2(a)(2).

4. Comment: Several commenters questioned the propriety of including other information in the one-time notice.

Response: We use our regulatory authority under section 1102 of the Act to require that the notice under paragraph (c)(2) inform the parents where and how to make their requests for review. Section 1102 authorizes the Secretary of HHS to publish regulations (not inconsistent with the Act) which are necessary to efficiently administer his functions under the Act. Although the Act only requires that "notice of the right to request a review" be provided, we believe it is essential for the notice document to designate how and to whom the request must be made. Giving more detailed instructions about making requests for reviews may actually serve to reduce the number of inquiries for further information as well as misdirected or incomplete requests.

5. Comment: Some commenters asked that we specify in regulations how a parent exercises the right to request a review. They inquired whether parents must make a one-time decision about whether to have a triennial review or if they may decide every 36 months whether they want a review. These commenters further inquired whether a State may limit the time a party has to elect a review, and if so, what is considered an adequate opportunity to exercise the option.

Response: We believe that requiring parents to elect only once whether or not a review is desired, which binds all future actions, is too restrictive. Therefore, parents cannot be required to make a one-time decision. States may not limit the time a parent has to request a review, for example, to no later than three months after the order is 36 months old. However, States may limit the frequency with which they conduct reviews, to, for example, once every 24 months. If they choose, States

may include in the notice information about these and other matters, such as explanations of specific procedures or a telephone number or address to contact for further details about the review process.

Frequency and Conditions of Reviews -- Section 303.8(c)(4)

1. Comment: Numerous commenters questioned whether States must act in advance of October 13, 1993 to address cases in which the child support order will be over 36 months old on October 13, 1993. Several objected to the proposal for targeting cases for review and OCSE's interpretation of the statutory requirement. Some asked whether a State must initiate review of all AFDC cases with orders that have not been reviewed or adjusted in the last 36 months or whether a State may phase-in a review process beginning on October 13, 1993.

Response: Section 466(a)(10)(B) of the Act, added by section

103(c) of Public Law 100-485 states that "(b)eginning 5 years after enactment [October 13, 1993]. . .States must implement a process for the periodic review and adjustment of orders. . . ." In the preamble to the proposed rule, we stated that this section effectively requires that orders in AFDC cases that were entered or last modified before October 13, 1990 must be reviewed before October 13, 1993, upon request of either parent or a State child support enforcement agency. Furthermore, in the proposed õ303.8(b)(1), we specified that the State plan for periodic review and modification must "target for review" orders in IV-D cases in which there is an assignment of support rights to the State. After reviewing the comments received and deliberating on

the language of the statute, we have deleted the requirement that between 1990 and 1993, States must conduct reviews and adjust all pre-October 13, 1990 orders upon request prior to October 13, 1993. It is our position that because the requirement for reviews at 36-month intervals is effective starting October 13, 1993, a State has no explicit duty prior to that date to conduct reviews other than as specified in its plan for how and when orders are to be periodically reviewed and adjusted as required under õ303.8(b). However, as a practical matter, if the State's plan and procedures do not address orders older than 36 months, and if these older cases are not actually processed through to completion with respect to review and adjustment, the number of such cases awaiting appropriate handling on October 13, 1993 may be overwhelming.

Although there is no mandate to do so, States may find it

advantageous to the best interests of the children involved and

the taxpayer to examine these older cases in a measured way

beginning now, in anticipation of the requirement for mandatory

triennial reviews. Since reviews are required only in cases in which the support rights are assigned to the State and in which the order is 36 months old or more, the impact of mandatory reviews may not be as severe as expected. Unpublished tabulations from the Bureau of the Census Current Population Studies, Child Support and Alimony Supplement 1988, reflect that of the 2.4 million women with children from an absent parent who are recipients of AFDC, 41 percent had support awards. According to the data, of these 990,000 awards, approximately 51 percent are over 3 years old. Thus, a nationwide total of 550,000 orders would be subject to review. The impact of reviewing these eligible orders would be further reduced by findings of good cause and inability to locate obligors. In this context, and given the potential benefits to children and taxpayers, we do not believe the statutory requirement is overly burdensome. To reap these benefits and to further minimize the volume of cases requiring reviews beginning on October 13, 1993, a number of States are already reviewing, in manageable installments, AFDC cases with orders over 36 months old.

2. Comment: One commenter questioned whether an AFDC IV-D case would be considered flawed for audit purposes if the court order is more than 36 months old and a review was not conducted.

Response: Audit regulations governing substantial compliance with the requirements for review and adjustment of child support orders have not yet been published. This issue will be addressed in those regulations.

Compelling evidence about inadequate and out-of-date support awards prompted enactment of the review and adjustment provisions in the first instance. Therefore, it is essential that States examine cases in which there is an assignment of support rights to the State and begin reviewing (and updating as necessary) any cases with orders over three years old as soon as possible.

As previously indicated, some States have implemented plans under which the entire AFDC caseload is being reviewed in equal monthly increments in advance of the October 13, 1993 effective date, so that the number of cases with orders which have not been reviewed for over 36 months will be far fewer, and more manageable. For example, subsequent review of a case reviewed in June 1991 would not be required until June 1994. However, within 15 calendar days of October 13, 1993, in any IV-D case in which child support rights are assigned to the State and the current child support order was established on or before October 13, 1990 and not subsequently reviewed, the State must determine whether to initiate a review in order to comport with the statutory requirement that orders be reviewed "not later than 36 months after the establishment of the order or the most recent review." Advance planning in recognition of the potential impact of reviewing certain cases at 36-month intervals is crucial.

3. Comment: One commenter suggested allowing a one-year grace

period to review all existent orders required to be reviewed that are older than 36 months on October 13, 1993.

Response: Unlike the Child Support Enforcement Amendments of

1984 (Pub. L. 98-378), wherein the statute permitted States needing legislation to come into compliance some additional time to enact such legislation, the Family Support Act of 1988 (Pub. L. 100-485) makes no such provision of additional time after October 13, 1993,to phase-in a review process. Moreover, because the 1993 requirements are effective a full five years after enactment of the Family Support Act, States have considerable advance notice in order to adopt any necessary laws, to anticipate the number of cases potentially needing review when the 36-month requirement becomes effective, and to otherwise address the operational implementation in a meaningful way. Further delay would only result in children being deprived of the appropriate amount of support to which they are entitled.

Under the timeframe requirements for conducting review and adjustment activities set forth in õ303.8(e), and explained in detail later in this Response to Comments section, States have 15 calendar days after October 13, 1993 to determine whether to initiate a review of any order in which a review is required in cases with orders older than 36 months on October 13, 1993. The timeframe requirements provide that States must complete the review and adjustment activities within 180 days of determining that a review is required or locating the non-requesting parent, whichever occurs later.

4. Comment: Another commenter requested that we address for audit purposes situations in which the child support order is older than 36 months at the time of application for IV-D services.

Response: A State may not specify a time period during which a new IV-D case must receive services before the case becomes eligible to be considered for review. A State must initiate a review of any case in which a review is required (cases in which there is an assignment of rights) or requested (by either parent in a non-AFDC case), in accordance with õ303.8(c)(4), regardless of the length of time services through the IV-D program have been provided. With the limited exception under õ303.72(a)(3)(iii) allowing States to limit past-due support amounts submitted for Federal income tax refund offsets to amounts which have accrued since the IV-D agency began to enforce the support order, States may not deny or restrict any services, including review, based on the length of time a case has been receiving IV-D services. Accordingly, the duration a case has been receiving IV-D services may not be a criterion for evaluating requests for review. Certainly, the order in which requests for review are received may be a factor in determining the relative order in which the request is processed within the framework of the required timeframes.

5. Comment: One commenter inquired whether the review must be

initiated, or actually completed, not later than 36 months after establishment of the order or the most recent review.

Response: The timeframes established under õ303.8(e) allow States a 15-calendar-day period within which to determine whether a review is required based upon the age of the order, the timing of the lastreview, or a request from either parent. Because the time allotted for conducting various review activities and actually completing the review through entry of an adjustment or determination that there be no adjustment may span up to 180 calendar days, or longer, if location is required, we consider the date of the "most recent review" to be either the date on which the order adjusting or determining not to adjust the order was signed by the judge or administrative hearing officer or, where no petition for adjustment was filed by either parent or the IV-D agency following the most recent review, the date that the 30-day period for challenging the review findings expired.

We recognize the possibility that in some cases, no action will be taken by either parent or the State following the review to

petition for adjustment of the order. Therefore, since an order

adjusting the amount of support or determining not to adjust the order may not exist in such instances, the date for the next required review must be based upon when the last review was concluded, that is, the date upon which the period for challenging the results of the review elapses. In any case in which a petition for adjustment is filed with the judicial or adjusting or determining not to adjust the previous order,

the date the judicial or administrative hearing official signs the order is the date from which the 36-month period for determining the age of the order runs. Furthermore, we believe that using the date the order is signed is the customary practice and the simplest for case tracking and monitoring purposes, even if such order specifies an earlier effective date for the change in the obligation, within the limitations permitted under õ303.106(b), governing retroactive modification of orders.

Thus, States can incorporate, within an automated case tracking and monitoring system, a trigger or flagging of each case on a 36-month cycle measured from either the date the most recent order was signed, or where appropriate, the date upon which the post-review challenge period ended. However, absent a request for a review in a non-AFDC case, the State need not conduct a review.

6. Comment: Several commenters objected to our proposed

requirement that States must establish procedures specifying

circumstances under which orders will be reviewed more frequently than every 36 months. Commenters indicated that to direct that

States establish an inclusive list of all circumstances in which child support orders would be reviewed more frequently than every 36 months would create an impossible task. One commenter

requested that States not be required to impose guidelines for

reviewing orders more frequently than every 36 months, because

either party has an absolute right to petition the court at any

time, if they believe the support order is no longer equitable. The commenter argued that such a guideline requirement could

unnecessarily restrict this right to petition the court.

Response: We agree with these commenters and have not includeda requirement in the final rule that States must have procedures specifying the circumstances under which reviews would be conducted more frequently than the minimum interval of "no later than 36 months after the establishment of the order or the most recent review" as mandated by statute.

States will undoubtedly encounter requests for reviews more

frequently than every 36 months or other interval established by the State for conducting mandatory reviews. Although States are not required to conduct reviews more frequently than every 36 months, there are certainly circumstances which would warrant

a review sooner than 36 months after the most recent order was

established. Changes in the financial circumstances which may justify an adjustment in the amount of child support are unpredictable events. A party may offer a reason that would be considered a suitable basis for adjustment (such as proof of a salary increase or decrease) and ask for another review. For

example, if a minimum support amount is ordered because the obligor is unemployed or employed part-time at the time the order is entered and the custodial parent or IV-D agency learns one year later that the obligor has secured significantly higher paying employment, a review may be warranted. Alternatively, if the obligor becomes permanently disabled, a review may be warranted although three years have not elapsed since the last review. These situations may occur at intervals sooner than 36 months following the previous decision to adjust or not adjust the order.

The statute does not place a limit on the number or frequency of requests for review a party may make, but requires reviews not later than 36 months after establishment of the order or the most recent review. Thus, States have the flexibility to establish their own criteria for performing more frequent reviews.

Although States are not required to conduct reviews more frequently than every 36 months, we urge States to consider the best interests of children in establishing any criteria for conducting reviews more frequently than at 36-month intervals. Should a State choose to review orders more frequently than required by Federal requirements, States are encouraged to

adopt an objective standard applicable to all requests rather than making subjective decisions about whether a case qualifies for a review. If a State does not allow, or restricts the availability of review if a request is made sooner than the interval established by the State for conducting reviews, it may wish to identify alternative avenues for review and consider referring requestors whose requests are made sooner than the established frequency to these other alternatives. One premise of the review and adjustment legislation was that child support orders become inadequate over time and that a mechanism for routinely checking the adequacy of the award amount which can be easily accessed by the parties is necessary. We urge States to respond to what we believe to be the spirit and intent of the Congress in enacting this provision of theFamily Support Act: to promote easier access to opportunities to seek adjustments in child support award amounts based on changes in the circumstances of the individuals affected by the obligations.

Exceptions to Mandatory Review -- Section 303.8(c)(4)(i)-(iii)

1. Comment: One commenter contended that because reviews are required in AFDC cases, but are not required unless a parent requests in non-AFDC cases, the statute fails to promote equal

treatment.

Response: We disagree. In conducting reviews and determining whether adjustments are warranted, States may not differentiate between non-AFDC cases and cases in which there is an assignment of support rights to the State. The only distinction made in the statute is whether reviews are mandatory (cases in which there is an assignment of support rights to the State) or performed only upon request (non-AFDC cases in which there is no such assignment to the State). Procedures used for reviewing cases and standards for making adjustments should be identical regardless of the public assistance status of a case.

It is our position that the State has an affirmative duty to seek reviews in cases in which there is an assignment of support

rights to the State. However, Congress did not mandate reviews in non-AFDC IV-D cases if neither parent requests a review. Requiring States to conduct reviews only upon request in non-AFDC IV-D cases may eliminate the unnecessary expense of time, paperwork, and personnel if the parties themselves do not want a review. It does place an affirmative duty on a parent to make the request in such cases. It also signals a need to make known the existence of this service and to clearly explain the processes and potential outcomes of a review so that the parties can make an informed decision.

Data from the five demonstration projects reflect an overwhelmingly low rate of authorization to conduct reviews among non-AFDC IV-D cases. In Oregon, authorizations were received in only 16 percent of the 1,626 non-AFDC IV-D cases determined to be eligible for review. Consistent findings are reflected among the other four demonstration projects. In Illinois, for example, fully 60 percent of non-AFDC cases with orders eligible for review were terminated from the review process due to lack of authorization. Reasons cited by non-AFDC obligees for refusing the available review indicate concerns about "rocking the boat" and jeopardizing compliance with current support payments or good relations with the obligor. In instances where payments are not being made, non-AFDC obligees claim that a review would be a waste of time. Other responses reflect a desire to avoid going to court, seeing the other parent, or risking custody or visitation issues being raised.

Circumstances Under Which Review Would Not Be in the Best Interests of the Child -- Section 303.8(c)(5)

1. Comment: Several commenters recommended that the responsibility for defining "best interests" be left to the States. Many other commenters suggested that we define the circumstances in which a "review would not be in the best interests of a child" to be instances in which a determination of good cause not to cooperate in establishing paternity or securing support has been rendered in an AFDC case.

Response: In the preamble to the proposed rule, we indicated that we had not otherwise defined "best interests of the child" in the proposed rule, and solicited comments regarding this provision. We specified that one approach to establishing a complete definition of the best interests of the child would be to tie the definition to that contained in AFDC regulations at 45 CFR 232.41 for refusal to cooperate. We further stated that another approach would allow States to establish criteria which would define the best interests of the child for purposes of reviewing an order, since a review and adjustment of a previously established order may not necessitate the cooperation of the custodial parent. Of the suggestions offered in response to our solicitation, we elected to follow those of the commenters who urged that the "best interests of the child" be linked to good cause determinations in cases in which the support rights are assigned to the State.

Circumstances under which cooperation in establishing paternity or securing support is against the best interests of the child for which good cause may be determined are specified in õ232.42. Regulations of the Health Care Financing Administration (HCFA) [42 CFR 433.147(c)(1)] governing waiver of cooperation in obtaining medical care support and payments require that the good cause determination be in accordance with factors specified in 45 CFR Part 232 for other good cause determinations.

The "good cause" exception to required reviews does not require a separate determination of good cause circumstances. Under õ303.31(b), upon receiving notice from the IV-A, IV-E, or

Medicaid agency that there has been a claim of good cause for

failure to cooperate, the IV-D agency will suspend all activities to establish paternity or secure support until notified of a

final determination by the appropriate agency. Additionally,

under õ302.31(c), the IV-D agency will not undertake to establish

paternity or secure support in any case for which it has received notice from the IV-A, IV-E, or Medicaid agency that there has

been a finding of good cause unless there has been a

determination by the IV-A, IV-E, or Medicaid agency, as

appropriate, that support enforcement may proceed without the

participation of the caretaker relative. Therefore, unless there has been a determination under õ232.41 that good cause exists,

and that child support enforcement may not proceed without risk

of harm to the child or caretaker relative, a case in which there

is an assignment of support rights must be reviewed.

In proposed õ303.8(c)(4), we specified that in a IV-D case in which there is an assignment of support rights to the State, an increase in support or the availability of health insurance must be considered to be in the best interests of the child unless either parent demonstrates it would not be in the child's best interests after a hearing. We have not included such a provision in the final rule, for several reasons. First, such a rule would essentially require a review to be done in order to determine whether a review should be done, since without a review, it may be difficult to determine whether an increase is likely or that

health insurance is available. Secondly, the statute links the best interests test to whether a review should be conducted, not to whether an adjustment should be entered. Thirdly, such a rule implies that a hearing be conducted to determine whether a result would be in the child's best interest, which may be burdensome on States. Fourthly, such a requirement may reflect a misinterpretation of the statutory language in section 466(a)(10)(B)(i) of the Act which specifies a "not in the best interests of the child" test for when a review is not required rather than an "in the best interests of the child" test governing when a review is required.

2. Comment: Several commenters urged that "not in the best interests" be governed by the outcome of the review such that requests to increase the child support award amount should be honored and requests to decrease the child support award amount should be refused.

Response: We cannot support this approach. Section 466(a)(10)(B)(i) clearly specifies that an exception is

permitted for cases in which a "review" would not be in the best interests of the child. It does not, however, provide any exception in the event the "adjustment or determination that there be no adjustment" would not be in the best interests of the child. Thus, the statute plainly connects the "child's best interest" test to the review, not the adjustment. The test applies to the process, not the results. States cannot fail to proceed with a required review or refuse a request to pursue a potential downward adjustment on the basis that the possible outcome would not be in a child's best interests. Decisions of whether or not to conduct reviews cannot be predicated on speculation that the results may be unfavorable to one or the other party or the child.

Furthermore, because review is defined in õ303.8(a) as an objective evaluation, conducted through a proceeding before a

court, quasi-judicial process, or administrative body or agency, of information necessary for application of the State's guidelines for support to determine the appropriate child support award amountand the availability of health insurance, it implies the absence of any preconceived ideas or biases about the outcome. It also requires consistent and uniform application of presumptive guidelines in all cases. Thus, once the review begins, it should proceed to completion. If a party is dissatisfied with the result and wishes to challenge the determination, an opportunity to do so must be available. To allow parties the option to stop a review in progress to prevent undesired results would render meaningless the statutory language which provides that the parties be given notice following any review of the proposed adjustment or determination that there be "no adjustment." The decision-maker may determine that the order should not be adjusted, but cannot render such a determination absent a review.

Pre-Review Notice Requirement -- Section 303.8(c)(6)

1. Comment: Several commenters requested removal of the 30-calendar-day notice requirement, so that reviews could begin immediately upon receipt of the necessary information.

Response: We recognize that in certain cases, waiting for

the 30 calendar days to expire may create unnecessary delay.

The 30-calendar-day requirement placed upon the notice is statutory. Until the 30 calendar days elapse, the formal review cannot begin, even if all the necessary information is available in advance. States may request that the parties consent, on a case-by-case basis, to waive the 30-calendar-day requirement and begin the review once the necessary information is available. However, without an amendment to the statute, the requirement cannot be changed or deleted. We have taken the notice requirements into consideration in determining timeframes for completion of review and adjustment activities.

Obtaining Information to Conduct Reviews -- Section 303.8(c)(6)(ii)

1. Comment: A number of commenters suggested the need for administrative agencies to obtain subpoena power in order to

more efficiently obtain necessary information from parties and

other sources.

Response: We urge States to consider practices used by the States which conducted the demonstration projects as well as other jurisdictions to improve the information gathering and verification process. For example, in Illinois, the principal method for obtaining the information necessary to conduct a review was through a computer-generated administrative subpoena automatically issued to obligors' employers and sent by certified mail at the same time the initial notice packets were sent to both parents. Illinois officials reported positive responses from employers. In fact, the information contained in the employer responses to the administrative subpoenas was sufficient for conducting reviews, as well as a valuable source of current address information.

Colorado, another demonstration State, issued administrative subpoenas to any obligor who failed to return an affidavit for child support issued with the initial notice. The administrative subpoenas, served via certified mail or a process server, directed the obligor to bring specified financial information to an adjustment hearing at the IV-D office. If the obligor failed to appear as directed after service of an administrative subpoena, a motion to compel could be filed, requiring the obligor to appear for a court hearing. Because information on the financial situation of both parents is necessary for application of Colorado guidelines, administrative subpoenas could also be served upon non-AFDC obligees who failed to return affidavits after two notices.

Another alternative would be for the court or administrative agency to include a provision in each new or adjusted order which requires each party to produce an annual income statement or for such a requirement to be adopted as a matter of State law. If

a party then fails to comply, they have violated a term of the order, or if the requirement is statutory, a State law, which may be punishable by contempt or fine, as governed by State law, court rule, or the language of the order itself.

2. Comment: Some commenters requested that we specify what information should be shared or exchanged between the parties as part of the review process. Several raised issues concerning confidentiality and safeguarding requirements. One commenter suggested that making the provision of information a term of every support order in all States would benefit States responding to requests for review in interstate cases.

Response: States should investigate options such as clauses in the orders or statutory authorization requiring that certaininformation be exchanged between the parties or filed with the court or agency to reduce the need for elaborate and protracted discovery. The required information should be limited to the necessary data required to compute the support award using State guidelines. Limiting the scope of information required and informing the parties in advance of the responsibility to provide it and that it will be shared will make the requirement less burdensome and minimize possible breach of confidentiality claims.

3. Comment: Several commenters noted problems with ensuring the accuracy and completeness of information provided by the parties or obtained from automated databases. Some contended that it is unreasonable to assume that the necessary information

can be easily obtained, and that discovery techniques to compel

disclosure are often cumbersome.

Response: We encourage States to consider alternative solutions to these operational concerns, from simplifying existing discovery techniques to possibly developing and requiring

the use of standardized financial affidavits. Additionally, States may wish to consider contacting employers or other income sources to obtain, verify, and update wage information. Many States routinely ask employers or other income sources to confirm income in the course of imposing income withholding. Certainly, such practices could be extended to the review process as a means of ensuring the reliability of the information.

With the exception of Federal income tax data and income information obtained from the Internal Revenue Service, Federal regulations do not specify verification requirements or procedures for using information obtained on behalf of IV-D cases. The same policies and procedures developed by the State for verifying IV-D information generally should be applied to verifying information obtained for use in the review process. The key point is that verified data, not unsubstantiated allegations, should form the basis of the decision-making process.

Scope of a Review

1. Comment: Several commenters inquired whether automated reviews would satisfy the requirement for conducting reviews.

Response: As defined in õ303.8(a)(3), a review is an objective evaluation, conducted through a proceeding before a court, quasi-judicial process, or administrative body or agency, of information necessary for application of the State's guidelines for support to determine the appropriate support award amount and the availability of health insurance. By definition, review contemplates more than a computer match of a case against wage reporting systems, public assistance records, unemployment

insurance rolls, and other automated databases. Because review

is intricately connected to guidelines for setting child support

awards and is designed to result in a determination of the

appropriate amount of child support to be paid, a key component

of the process is the computation of the child support amount

using presumptive State guidelines. Typically, in most States,

this will require gathering information sufficient to complete a

worksheet or perform calculations, much of which may be known

only to the parties involved. Some States have automated the State guidelines. Unless the databases accessed by the State permit retrieval of the necessary information sufficient to conduct a review as defined in õ303.8(a)(3), such access cannot be considered a complete review. In States which permit income to be imputed to a party in certain situations for the purpose of applying support guidelines, information from databases may be the only objective evidence available and considered sufficient for conducting a review in those instances. If a review is required, a full review must be conducted to reach a decision that the order be adjusted upward, downward, or not at all. Only a review could produce a "determination that there should be no change." Thus, the review itself is a "screen" to determine whether an adjustment in the amount of child support should be sought. In situations in which a review is not required, such as a case in which the support order is less than a year old, relying on information from automated databases to determine whether a complete review is warranted is permissible, unless supplemental information is brought to the attention of the agency conducting the review.

The experience of the Oregon Child Support Updating Project

in using partial automated reviews indicated that sole reliance

on computer matching to conduct reviews cannot ensure the

accuracy of the information used to compute the appropriate

child support amount under State guidelines. Oregon determined

that case disposition using the Partial Automated Review (PAR)

process often took longer and required greater work than the

full manual procedure. Under the PAR process, the child support

agent accessed automated data sources, computed a new child

support award amount using that data, and notified the parents of

the result. Because the results were often based on incomplete data, parents usually submitted additional information, which required that the support amount be recalculated. The initial computations obtained under PAR created false parental expectations in many situations, with the consequence that staff time had to be diverted to responding to complaints and explaining why the final result was lower or higher than expected.

Two reasons were cited in the final report on the Oregon project

to explain the difficulty with PAR. First, for every case in

which adequate Oregon Employment Wage Commission (EWC) earnings

information was available for the obligor, the child support

agent prepared a child support calculation worksheet and a

proposed consent agreement and attached these documents to the

initial notice letters to both parents. Because both parents

rarely agreed to the new support amount specified in the

notice, preparing the documents was usually wasted effort.

Secondly, the simulated child support calculation was based only on financial information obtained from EWC or imputed. If either parent provided additional earnings or allowable deductions

information in response to the notice, the child support agent

had to calculate a new child support amount.

2. Comment: One commenter argued that to complete a full review on all cases would require significant additional resources and cause unnecessary work.

Response: If an order is eligible for review based on its age, a State may not substitute a pre-screening or a partial review for a complete review by speculating as to the ultimate outcome. If, however, an objective evaluation of the circumstances in a particular case indicates no apparent change in the parents' situation (e.g. the obligation was originally established under guidelines, neither the obligee nor the obligor's income have changed), the State could readily assess that no adjustment is appropriate and notify the parties accordingly, allowing the parties the right to challenge such determination. States are

also permitted to establish a reasonable quantitative standard, or threshold, to guide decisions whether to petition for an adjustment following a review. This topic is discussed more extensively elsewhere in this preamble.

To reduce the need suggested by the commenter for additional resource requirements and the possibility of unnecessary work,

we encourage States to adopt procedures and other means that facilitate entering adjusted orders on the basis of stipulations or consent agreements between the parties, as long as the appropriate amount of child support to be paid is determined in accordance with State guidelines. For example, all of the demonstration projects originally proposed to test a consent-oriented approach to obtaining adjusted orders, with streamlined or simplified administrative, quasi-judicial, or expedited judicialprocesses. Prior to processing a case through the regular judicial or administrative channels, project staff would attempt to obtain stipulations to a modified order based on guidelines.

In their demonstration projects, Colorado, Delaware, and Florida were able to obtain adjusted orders based upon out-of-court stipulations. Data from the Colorado project reflect that 62 percent of adjusted orders were accomplished by consent of the parties. Similarly, in Florida, 77 percent of the adjusted orders were obtained through stipulation of the parties. The vast majority (99.6 percent) of Delaware's modifications were obtained through the mediation process. In Illinois, all but one of the 1,382 adjusted orders were obtained through the judicial process. In Oregon, overall, 42 percent of the adjusted orders were obtained by consent of the parents, 28 percent were obtained by default, and 30 percent were obtained in an administrative or judicial hearing.

States have considerable latitude and flexibility in determining the site and degree of formality for reviews, as long as required reviews are conducted through a proceeding before a court, quasi-judicial process, administrative body or agency, notices are issued, timeframes are met, and guidelines are used, in compliance with Federal law and regulations. The experiences of the demonstration project States illustrate that not every case in which an adjustment is warranted requires a full judicial or administrative hearing to obtain a disposition.

Permissive Review

1. Comment: Several commenters questioned whether reviews may be pursued in non-AFDC cases without a request from a parent.

They asked whether, in a non-AFDC IV-D case, a potential

adjustment could be forced upon unwilling parties if the State

chooses to review and the review results in a determination that the child support amount should be changed. If a State decides to review absent a request, is there a right to refuse the review before it is conducted or must the parties await the review results and then challenge the determination?

Response: The Act requires that States review, upon the request of either parent, any order that does not have an assignment of support rights as defined in õ301.1. The law does not preclude a State from going beyond the statutory requirement, therefore, States may conduct a review of all non-AFDC IV-D cases with orders. The notice of the right to request a review required at õ303.8(c)(2) would provide parents with information on the circumstances under which the State would conduct a review. If

the State determines that a review is warranted, even if not requested, either or both parents have a right to initiate proceedings to challenge the proposed adjustment or any other determination made on the basis of the review. Therefore, while such a review may be conducted without a request from either party, to conduct a review absent a request may be an inefficient use of State resources.

With respect to the question concerning the right to refuse a review conducted on the State's own initiative, once the State has decided to conduct a review absent a request from either parent, the review and adjustment process may proceed to completion despite the parents' objections. The parties may not refuse the review. The opportunity to challenge the proposed adjustment is available to the parents following notification of the results of the review or within the judicial or administrative proceedings for adjusting the order. Certainly, a State may not close a case or deny further services to a non-AFDC custodial parent who did not request, and refuses to cooperate in, a review conducted at the State's initiative. Based on the experiences in the demonstration projects, we believe that States' efforts will be focused upon conducting the required and requested reviews, and, if the State chooses, reviews on their own initiative with which the parties are cooperative, rather than devoting time and expense to elective activities in which both parties are unwilling participants in the process.

The reason for not requesting a review may be a lack of knowledge that review is available. This underscores the importance of notifying the parties of the right to request a review. In its preliminary report on the Wisconsin Order Revision Pilots, the Institute for Research on Poverty, University of Wisconsin-Madison, cites various reasons why custodial parents might not pursue an action to upgrade an order which could potentially increase the income available for the children in their custody. These reasons include: (1) a perception that the existing award is "final"; (2) lack of knowledge as to how to pursue a change; (3) an assumption that the process would be too expensive; (4) fear of "rocking the boat" (causing custody or visitation issues to surface); (5) fear that action would produce a lower award; and (6) lack of awareness of the effect of inflation on the real value of the support award over time. The Oregon Child Support Updating Project conducted a telephone survey or interviews of non-AFDC parents who failed to return a review authorization form, in order to better understand why parents did not authorize a review of their child support orders. Numerous reasons were mentioned by parents for not authorizing a review. Many responses suggested that obligees believed it was pointless to adjust a support amount that the obligor was not presently paying. Other obligees seemed concerned that the obligor may stop paying support if the ordered amount was increased. Still others appeared to have some problems with the forms or were concerned about what direction (upward or downward) the

adjustment would take. Similar findings are indicated in the results among the other four demonstration projects. Across the

four projects, non-AFDC cases were terminated from the review process at a much higher rate (72 percent) than AFDC cases (60

percent), principally because of a lack of authorization or cooperation needed from non-AFDC IV-D cases to conduct a review. Reasons typically cited for refusing a review mirror those raised in the earlier Wisconsin and Oregon updating projects. Review terminations in AFDC cases generally resulted from AFDC case closings, inability to locate the obligor, or lack of employer or income information upon which the review could be conducted.

Basis for Seeking Adjustment--Section 303.8(d)

1. Comment: Several commenters requested regulatory language to enhance their efforts in securing legislative amendments to change their statutory change in circumstances requirements. As indicated by the commenters, in most States, the party seeking the modification of a child support order, must allege and prove

that a material, significant change in circumstances has occurred since establishment of the current order before a change is warranted. As noted by commenters, this burden in many States has traditionally been quite stringent, often requiring that parties prove that the claimed change in circumstances could not have been contemplated at the time of entry of the original order.

Response: As required under section 467(b)(2) of the Act, added by section 103(a) of Public Law 100-485, effective October 13, 1989, there shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that

the amount of the award which would result from the application

of guidelines for child support award amounts within the State is the correct amount of child support to be awarded. In õ303.8(d)(1), we specify that inconsistency between the existent child support award amount and the amount of child support which results from an application of the State guidelines must be an adequate basis, under State law, for petitioning for an adjustment of an order in a IV-D case. Two exceptions to this requirement are permitted. The first exception is allowed if the State establishes a reasonable quantitative standard based upon either a fixed dollar amount or percentage, or both, as a basis for determining whether an inconsistency between the existent child support award amount and the amount of support which results from application of the guidelines is adequate grounds for petitioning for adjustment of the order. The second exception is permitted if the inconsistency is due to the fact that the amount of the current child support award resulted from a rebuttal of the guideline amount and there has not been a change in the circumstances which resulted in the rebuttal of the guideline amount.

In recent years, several States have adopted legislation expanding the definition of material or substantial change in circumstances to specify that adoption of guidelines alone constitutes a requisite change in circumstances or otherwise addressing the application of guidelines in modification proceedings. Illinois permits a one-time modification of those orders established before the guidelines were implemented to adjust the child support award to guideline levels, without the necessity of proving a change in circumstances. Appellate courts in at least two States have ruled that the adoption of support guidelines changed the rules for determining child support. One opinion holds that the material change in circumstances test no longer applies, that the question now is whether there is a "significant variance" between the guidelines and the amount of child support agreed to by the partiesor ordered by the judge, and that, had the State legislature intended that the guideline statute could only be invoked upon a change in circumstances, it would have clearly said so.

2. Comment: One commenter suggested that States, in establishing the threshold, consider percentage amounts rather than fixed dollar amounts, noting that a $10 change makes a greater impact on a $50 monthly award than a $100 monthly award. Another commenter stressed that setting the threshold too low would literally bury the system with cases requesting upward or downward adjustments where there are minor fluctuations in either party's income; setting the threshold too high would foreclose cases otherwise appropriate for adjustment.

Response: We do not prescribe a particular fixed dollar or percentage in the regulation, as we believe this will allow States the necessary flexibility and discretion to establish an appropriate and reasonable quantitative standard. If a State establishes a threshold test, we urge the State not to aim too high or too low. In establishing a threshold, States may wish to consider adopting one which combines a "percentage or fixed dollar amount, whichever is lesser" so as make the test more equitable across both income levels and family size. For example, meeting a 20 percent increase/decrease test is considerably more difficult in the case of a $500 order for three children than a $150 order for one child. In the former situation, the order would have to increase/decrease under guidelines by at least $100 in order to meet the threshold. In the latter, a $30 difference would suffice to warrant seeking an adjustment.

We encourage States to consider the experiences of the demonstration project States as well as other jurisdictions which have adopted thresholds applicable to review and adjustment processes. For example, Colorado and Florida will seek adjustment if there is a difference of at least 10 percent (plus or minus) from the current order amount. Illinois requires a change of plus or minus 10 percent and at least $5 in the order amount. Delaware requires a change of at least $25 in the monthly order amount. At the time of the Oregon project's inception, the criterion for modification in the State was that the moving party allege and prove a "substantial change in circumstances since entry of the order." Processing modifications became less burdensome and more predictable when Oregon adopted a guidelines-based modification standard and implemented an administrative criterion for the project of plus or minus 10 percent of the current support amount, and at least $25 per month as the minimum requisite change. We encourage States not only to examine the approaches adopted elsewhere, but to involve and work closely with the judiciary, the private bar, parents' groups, and other concerned parties in establishing the percentage or fixed dollar amount, or both, as a threshold.

We recognize that the traditional "substantial change in

circumstances" test is applicable in many States. However,

we believe that, by requiring States to use guidelines as a rebuttable presumption of the correct amount of support to be paid and requiring periodic review and adjustment, if appropriate, in accordance with such support guidelines, the

Congress intended that States use guidelines as the basis for determining the need to change the amount of the child support

award, rather than any other standard. The adoption of a threshold amount constituting a change sufficient to proceed with a request for an adjustment, following a review, will allow the review to be the means through which potential eligibility or suitability of an order for adjustment is determined.

Establishment of a threshold will enable a reviewer to ascertain, based on a calculation of the amount of support presumed to be correct under guidelines, whether an adjustment is warranted. For example, if the IV-D agency conducts a review and determines that the proposed change in the amount of support does not meet the threshold established by the State for determining whether to petition for an adjustment, the IV-D agency does not have to proceed to file a petition. Certainly, under such circumstances, the decision by the IV-D agency not to proceed with a petition or motion to adjust the order does not preclude either parent from filing such a petition through the judicial or administrative process, either through counsel or pro se. We encourage States to include, as part of the notice sent to each parent concerning the right to request a review and other publicity about the review and adjustment process, information about any thresholds used in the review process and the avenues available for obtaining adjustments to the support order.

3. Comment: Several commenters suggested that the threshold be merely a starting point for deciding whether an adjustment is warranted. One commenter asked that we consider permitting States to use the numeric standard in concert with non-quantifiable standards to ensure that determinations about the appropriateness of adjustment are accurate.

Response: We believe that using the reasonable quantitative

standard, or threshold, as merely the starting point or using non-quantifiable standards along with guidelines would provide more latitude to apply additional criteria to decide whether adjustment is warranted than was intended by the Act. Because the Act ties adjustment directly to guidelines, any latitude or variance should come from the guideline computation itself and the opportunity afforded parties to rebut the presumption that the guideline amount is the correct amount of child support to be awarded in a case. We do not believe that requiring stricter criteria for adjustment beyond inconsistency with guidelines is necessary, because the opportunity to present other non-quantifiable evidence is a component of the right to rebut the presumption by demonstratingthat application of the guidelines in a particular case would be unfair or inappropriate.

As indicated earlier, the reasonable quantitative standard, or threshold, established by the State should be used as a basis for deciding whether to petition for an adjustment. Presumptive guidelines, not the threshold established by the State, must be the basis upon which the judicial or administrative entity with authority to adjust child support order determines whether or not to adjust the order. Therefore, even if an established threshold is not met in a particular case, such that the IV-D agency or other reviewer decides not to proceed with a petition to adjust the order, the court or administrative authority may still act upon a petition from either parent, apply the guidelines, and establish an adjusted order.

4. Comment: One commenter observed that because guidelines are to be used as a rebuttable presumption, any order established under guidelines which differs from the guideline amount is immediately inconsistent. The commenter indicated that it may be inappropriate to petition for an adjustment merely because of an inconsistency due solely to a rebuttal of the presumption. The commenter suggested that all financial factors originally considered by the court should be reviewed when determining whether an adjustment is warranted.

Response: We agree with the commenter's analysis and have incorporated an exception to the inconsistency with guidelines requirement in õ303.8(d)(1) to address such situations. The

exception encompasses cases in which the inconsistency between the current child support award amount and the amount of support required under guidelines is due to the fact that the amount of the current support award resulted from a rebuttal of the guideline amount and there has not been a change in the circumstances which resulted in the rebuttal of the guideline amount. The existence of situations such as that illustrated by the commenter underscores the importance of compliance with the requirement regarding written findings or specific findings on the record of a judicial or administrative proceeding for the award of child support regarding rebuttal of the guidelines. As required by õ302.56(g), findings that rebut the guidelines shall state the amount of support that would have been required under the guidelines and include a justification of why the order varies from the guidelines. Having such information available should prove beneficial in determining whether an adjustment is

appropriate due to an inconsistency or whether the exception is applicable in a particular case.

Need for Provision for Health Care Needs

1. Comment: One commenter indicated a belief that determining the availability of health insurance will not result in enough

benefits to the child to justify a substantial investment

in staff time.

Response: Since December 2, 1985, under õ303.31(b)(1), IV-D

agencies have been required to petition the court or administrative authority to include health insurance that is available to the absent parent at reasonable cost in new or modified court or administrative orders for support, unless the custodial parent and the children have satisfactory health insurance other than Medicaid. The IV-D agency is also required to petition the court or administrative authority to include medical support whether or not health insurance at reasonable cost is actually available to the absent parent at the time the order is entered or modification of current coverage to include the children is immediately possible. Additionally, since September 16, 1988, under õ303.31(b)(4), IV-D agencies are required to petition the court or administrative body to modify support orders to include a requirement for medical support in the form of health insurance, in cases identified under State criteria as having high potential for obtaining medical support. Thus, medical support responsibilities are not new requirements for States.

We believe that requiring States to determine the need to provide for the health care needs of the children as part of the review process reinforces the existent medical support enforcement requirements. Furthermore, the review process serves as a convenient way to deal with both the financial support and the health care needs of the children in the same transaction and to eliminate duplication of effort. Section 302.56(c)(3) requires that State guidelines for setting child support award amounts must provide for the children's health care needs, through health insurance coverage or other means.

In all five demonstration project States, modification for medical support could be sought independently of any change in the amount of the child support award and associated legal standards. In the earlier demonstration project in Oregon, some provision was made for obligors to carry medical insurance for their supported children in all but four percent of the adjusted orders. Oregon determined that a major benefit of reviewing previous support orders was the high proportion of adjusted orders that included a provision for the obligor to carry medical insurance. Among the orders adjusted through the Oregon project, 63 percent of orders in AFDC cases, 75 percent of orders in former AFDC cases, and 54 percent of orders in non-AFDC cases did not previously provide for the health care needs of the children, but did so as a result of the adjustment process. Data from the other demonstrations projects indicate similar outcomes. For example, modifications for medical support were obtained in conjunction with adjustments in the order amount in 69 percent of the cases in Colorado and nearly half of the cases in Illinois.

Given the high cost of health care and the relatively nominal

cost of health insurance, OCSE considers medical support to be

generally advantageous to children. In cases in which there is an assignment of support rights, as defined under õ301.1, medical support need not be sought if the custodial parent has satisfactory health insurance coverage other than Medicaid available on behalf of the children. However, as provided under õ303.31(b)(2)(i), the medical support requirement is not dependent on the absent parent actually having coverage available at reasonable cost at the time the order is entered or adjusted. With respect to non-AFDC cases not receiving Medicaid, the decision to petition for inclusion of medical support is guided by a determination of high potential cases under State criteria required under õ303.31(b)(3) and the consent of the individual applying for IV-D services, as specified under õ303.31(c).

Timeframes for Review and Adjustment -- Section 303.8(e)

1. Comment: Numerous commenters objected to placing timeframes

for review and adjustment with those governing establishment of

support obligations. In general, most commenters urged us to put timeframes in a separate section, apart from the timeframes in

õ303.4. Many commenters expressed concern that the proposed

wording and inclusion with the establishment requirements made

the timeframe confusing, and subject to the potential

misinterpretation that every time a parent was located or

paternity was established, a review had to be conducted. Most commenters urged us to wait until the reports from the review and adjustment demonstration projects were completed before establishing timeframes (and before making regulations effective).

Response: In response to these comments, the final regulation specifies two explicit timeframes which must be met by States in conducting review and adjustment activities. Section 303.8(e)(1) requires that in any case in which support rights are assigned to the State under õ301.1, the State must determine, within 15 calendar days of October 13, 1993, or the date the child support order is 36 months old, whichever date occurs later, whether a review should be conducted. Subsequent determinations about whether to conduct a review must be made in accordance with paragraph (c)(4), at 36-month intervals based upon the date the child support order was adjusted or the date an order was entered determining that the child support order should not be adjusted, or, in any case in which a petition or motion for adjustment was not filed following a review, the date upon which the post-

review challenge period ended.

Section 303.8(e)(2) imposes a 15-calendar-day timeframe on the State for making a determination whether a review should be conducted where a request for a review is made, based upon the date of receipt of a request. Section 303.8(e)(3) specifies a 180-calendar-day period for conducting specified review and adjustment activities, measured from the date of determining that a review should be conducted or locating the non-requesting parent, if necessary, whichever is later. Our decision to expand the timeframe from the 90 days specified in the proposed rule is based upon the suggestions of commenters and indications from the experiences in the demonstration projects, as well as recognition of the need to incorporate the statutory 30-day pre-notice and 30-day post-notice requirements.

The findings and experiences of the demonstration projects substantiate that a 180-calendar timeframe is both necessary and reasonable. The time for completing the review and adjustment process experienced in the demonstration States was measured from case selection as the starting point. Location of the non-requesting parent was not a criteria for selection, but a post-selection, pre-review activity. Thus, time devoted to location was a component of the processing times used to compute the average length of time the review and adjustment process encompasses. The 180-calendar-day timeframe imposed by these regulations does not commence to run until the non-requesting parent is located or determination to review is made, whichever is later. We believe including location as a necessary prerequisite allows States additional time of up to 75 calendar days after determining location is necessary to access location sources and ensure that locate information is sufficient to take the next appropriate action in the case, as required by õ303.3(b)(3).

In the Oregon Child Support Updating Project, modified orders required an average of 200 calendar days to be established, measured from the date a case was selected for review to the date a modified order was entered. This average was achieved using expedited court dockets in the nine participating counties, involving designating a half day of court time each month strictly for handling modification cases. The Oregon demonstration project found no significant difference in time required to obtain adjusted orders by administrative process (190 calendar days) as compared to judicial processes (212 calendar days). As noted in the "Findings from the Third Year Research" (September 1991) under Oregon's project, the greater time required to obtain judicial modifications prompted Oregon to adopt legislation giving the Oregon Support Enforcement Division authority to modify all orders under its jurisdiction--both those established by administrative process and those established by judicial process--through an administrative process. Under this law, administratively-modified orders that had been originally established by a judge, will still be ratified and approved by a judge. Because such a process is anticipated to eliminate delays associated with docketing court hearings, the change to a totally administrative process is expected to reduce the calendar time required to obtain an adjusted order. Third-year supplemental data from the Oregon project reflect that the method used for obtaining the adjusted order also influenced the amount of time required to complete the process. The average time was significantly less for adjusted orders obtained by consent (146 calendar days) than those obtained by default (217 calendar days) or after a judicial or administrative hearing (248 calendar days).

Data from the demonstration projects conducted in Colorado, Delaware, Florida, and Illinois reflect that the overall average length of time from case selection to adjustment across all four projects for 3,207 cases in which adjustment activities were completed was 195 calendar days. In Delaware, the average time required was 174 calendar days and in Illinois, an average of 171 calendar days was necessary. The average time to obtain an adjusted order in the Florida project was 162 calendar days.

Colorado experienced the longest average time (252 calendar days)from selection to adjustment. This average was clearly affected by the method by which the adjustment was obtained.

Of the orders adjusted, 576 were obtained by stipulation of the parties, representing 62 percent of the total cases modified. The average time required for processing these cases was 216 calendar days. Cases in which obtaining an adjustment involved a court hearing, including modified orders by default, took longer, and affected the overall average amount of time required. Data from the demonstration projects also indicate that interstate cases do take longer, but only about one month longer.

In Colorado, for example, findings indicate that, on average, adjusting an interstate case took only nine days longer than an in-State case. These findings are consistent with those from the Oregon project. In Oregon, the average calendar time to obtain an adjusted order was only slightly longer (16-19 calendar days) for cases in which one parent lived in the State than for cases in which both parents lived in the State.

During the 180-calendar-day timeframe, all necessary preliminary activities must occur, including preparation of any pleadings and documents necessary before issuance of the advance notice of the review. Following the issuance of the notice, and as explicitly required by statute, at least 30 calendar days must elapse before the review is actually conducted. This period should be the time for gathering information, both from the parties and by accessing any other databases or information sources available to the State (labor/wage screens or employer inquiries, for example).

The balance of the period following the 30-calendar-day pre-review period allows time for conducting the review, determining whether an adjustment is warranted, preparing any written findings, sending the post-review notice of the results to the parties, petitioning for adjustment, where indicated, and adjusting the order or determining that no adjustment should be made, no later than the 180th calendar day following the determination that a review should be conducted or locating the

non-requesting parent, whichever occurs later. Depending upon the State's processes for conducting reviews and making adjustments to child support orders, each of the various activities within the 180-calendar-day timeframe may be the responsibility of a different entity, including the IV-D agency, the judicial or administrative process, and the parties.

2. Comment: Several commenters contended that a timeframe is not intended by Congress because review and adjustment are not mentioned in section 121 of Public Law 100-485, which requires the Secretary to establish time limits within which States must accept and respond to requests for assistance in establishing and enforcing support orders, including requests to locate absent parents, establish paternity and initiate proceedings to establish and collect support awards.

Response: We disagree with the commenter's contention that Congress intended that no timeframes apply to the process for review and adjustment of orders. As set forth in section 452(a) of the Act, OCSE is required to establish such standards for State programs as determined to be necessary to assure that such programs will be effective. Additionally, as specified in section 452(h) of the Act, these standards shall include standards establishing time limits governing the period or periods within which a State must accept and respond to requests for assistance in establishing and enforcing orders. While the statute mentions the kinds of requests included, the specific activities enumerated are by no means inclusive of the various activities involved in establishing and enforcing support orders for which standards or time limits are appropriate. We use our regulatory authority, under section 1102 of the Act, to impose a timeframe requirement for completion of review and adjustment activities. The timeframe of 180 calendar days means that review and adjustment falls outside of the basic expedited processes requirement under õ303.101(b)(2), which requires that actions to establish or enforce child support must be completed from time of successful service of process to the time of disposition within the following timeframes: 90 percent in 3 months, 98 percent in 6 months, and 100 percent in 12 months.

Review and Adjustment in Interstate Cases -- Section 303.8(f)

1. Comment: One commenter asked that regulations address whether a rendering court has jurisdiction to honor a request to adjust an order for support if neither party presently resides in that State.

Response: We believe that absent any controlling Federal law, State law governs such circumstances. Therefore, it would be inappropriate to delineate in regulations matters within the authority of each State. Generally, a court which enters a child support order retains continuing subject matter jurisdiction to review and adjust such order and continuing personal jurisdiction over the parties regardless of their present residence provided that the court had personal jurisdiction over the parties at the time the order was entered.

If the rendering court had personal jurisdiction over the parties at the time the order was entered, such jurisdiction is not lost

with respect to actions flowing out of the original order such as enforcement or adjustment, regardless of where the parties are

presently situated. However, a rendering court, although it may have ongoing jurisdiction, may decline to exercise such jurisdiction if it considers itself to be an inconvenient forum because none of the parties to the original action currently reside in or have any present connection with that State. For example, following a divorce decree in one State, both parties may have relocated to other States. Instead of conducting the review "long-distance" or forcing both parties to litigate the adjustment in the original court, one party could register the child support order in the court of another State which has personal jurisdiction over the other party.

2. Comment: One commenter inquired whether States will be required to share their review and adjustment criteria with all other States so that in interstate cases the initiating jurisdiction can provide necessary documentation for the responding State to act on the request and so that individuals affected will know in advance what criteria will be used to make a determination.

Response: In December 1990, OCSE distributed a "State At A Glance" directory on computer diskette to each State, which contains State profile information about each State as well as specific documentation requirements for each of the various establishment and enforcement functions, including modification. This publication may be a valuable resource for States in preparing requests for review for referral to other States.

OCSE is exploring the possibility of periodically updating this reference tool to reflect changes in State law and practices.

3. Comment: Several commenters urged that regulations include a separate section on interstate review and adjustment.

Response: Accordingly, we added õ303.8(f) to address specific requirements for providing review and adjustment services in interstate cases.

Executive Order 12291

The Secretary has determined, in accordance with Executive Order 12291, that this proposed rule does not constitute a "major"

rule. A major rule is one that is likely to result in:

(1) An annual effect on the economy of $100 million;

(2) A major increase in costs or prices for consumers,

individual industries, Federal, State, or local government

agencies, or geographic regions; or

(3) Significant adverse effects on competition, employment,

investment, productivity, innovation, or the ability of

United States-based enterprises to compete with foreign-based

enterprises in domestic or export markets.

This rule implements specific requirements of Public Law

100-485. We expect the additional costs to the States will be less than $100 million. Any costs will be administrative and can be minimized through careful State planning. We believe increased collections as a result of adjustments to child support award amounts and the imposition of immediate wage withholding in these cases will exceed increased administrative costs.

Regulatory Flexibility Analysis

The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the

Regulatory Flexibility Act (Pub. L. 96-354), that this proposed

regulation will not result in a significant impact on a

substantial number of small entities. The primary impact is on

State governments and individuals, which are not considered small entities under the Act.

List of Subjects

45 CFR Parts 302 and 303

Child support

Grant programs--social programs

Reporting and recordkeeping requirements

(Catalog of Federal Domestic Assistance Program No. 93.023, Child

Support Enforcement Program)

Dated: May 16, 1992.

Jo Anne B. Barnhart

Assistant Secretary

for Children and Families

Dated: July 22, 1992.

Louis W. Sullivan, M.D.

Secretary

For the reasons set out in the preamble, 45 CFR chapter III is amended as follows:

PART 302--STATE PLAN REQUIREMENTS

1. The authority citation for part 302 continues to read as

follows:

Authority: 42 U.S.C. 651 through 658, 660, 664, 666, 667, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).

2. Section 302.70 of this part is amended by revising paragraph (a)(10) to read as follows:

õ302.70 Required State laws.

(a) * * *

(10) Procedures for the review and adjustment of child support

orders:

(i) Effective on October 13, 1990 until October 12, 1993,

in accordance with the requirements of õõ303.8(a) and (b) of

this chapter; and

(ii) Effective October 13, 1993, or an earlier date the State

may select, in accordance with the requirements of õõ303.8(a) and (c) through (f) of this chapter.

* * * * *

PART 303--STANDARDS FOR PROGRAM OPERATIONS

3. The authority citation for Part 303 continues to read as

follows:

Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667,

1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and

1396(k).

4. Section 303.7 is amended by adding paragraph (b)(6) to

paragraph (b), by adding paragraph (c)(7)(v), and by amending

paragraph (c)(8) by replacing the word "modification" with the word "adjustment," to read as follows:

õ303.7 Provision of services in interstate IV-D cases.

* * * * *

(b) * * *

(6) Send a request for review of a child support order to another State within 20 calendar days of determining that a request for review of the order should be sent to the other State and of receipt of information from the requestor necessary to conduct the review in accordance with õõ303.8(f)(1)

of this part.

(c) * * *

(7) * * *

(v) Reviewing and adjusting child support orders upon request in accordance with õ303.8(f)(2) of this part.

* * * * *

5. Section 303.8 is amended by adding new paragraphs (c), (d), (e), and (f) to read as follows:

õ303.8 Review and adjustment of child support orders.

* * * * *

(c) Review of child support orders. Effective October 13, 1993

or an earlier date the State may select, the State must, when

providing services under this chapter:

(1) Have in effect and use a process for review and adjustment of child support orders in effect in the State, including a

process for challenging a proposed adjustment or determination.

(2) Notify each parent subject to a child support order in the State of the right to request a review of the order, and the appropriate place and manner in which the request should be made.

(3) Periodically publicize the right to request a review as part of its support enforcement services as required under õ302.30 ofthis chapter and include notice of this right as part of information on IV-D services under õ303.2(a)(2) of this part.

(4) Review child support orders at 36-month intervals after

establishment of the order or the most recent review, unless:

(i) In a case in which there is an assignment as defined in õ301.1 of this chapter, the State determines, in accordance with õ303.8(c)(5) of this section, that a review would not be in the best interests of the child and neither parent has requested a review; or

(ii) In a case in which there is no such assignment ofsupport rights to the State, neither parent has requested a review; or

(iii) In a case in which medical support rights are assigned under 42 CFR 433.146, but child support rights are not assigned to the State under õ232.11 of this title or õ471(a)(17) of the Act, the order requires the provision of health insurance coverage, and neither parent has requested a review; or

(5) Determine that a review of the child support order would not be in the best interests of a child if there has been a finding of good cause as set forth at õõ302.31(c) and 232.40 through 232.49 of this title or under 42 CFR 433.147(c), and the State or local IV-A, XIX, or IV-E agency has determined that support enforcement may not proceed without risk of harm to the

child or caretaker relative.

(6) Notify or serve process upon each parent subject to a child support order in effect in the State of:

(i) Any review of such order at least 30 calendar days before commencement of the review, and

(ii) Any information necessary to conduct the review that each parent must provide and the date by which such information must

be provided.

(7) Following any review, notify each parent subject to the child support order of:

(i) A proposed adjustment or a determination that there should be no adjustment in the order, and

(ii) Each parent's right to initiate proceedings to challenge theproposed adjustment or other determination, not less than 30 calendar days after the notice.

(8) Adjust the order, or determine that there should be no adjustment, as appropriate, in accordance with the State's guidelines for setting child support awards and paragraph (d) of this section.

(d) Basis for seeking adjustment. (1) Inconsistency between

the existent child support award amount and the amount of child support which results from application of the State guidelines

must be an adequate basis, under State law, for petitioning for an adjustment of an order in a IV-D case, unless: (i) the inconsistency does not meet a reasonable quantitative standard established by the State, in accordance with paragraph (d)(2) of this section or (ii) the inconsistency is due to the fact that the amount of the current child support award resulted from a rebuttal of the guideline amount and there has not been a change in the circumstances which resulted in the rebuttal of the guideline amount.

(2) The State may establish a reasonable quantitative standard based upon either a fixed dollar amount or percentage, or both, as a basis for determining whether an inconsistency between the existent child support award amount and the amount of support which results from application of the guidelines is adequate grounds for petitioning for adjustment of the order.

(3) The need to provide for the child's health care needs in the order, through health insurance or other means, must be an adequate basis under State law to petition for adjustment of an order to provide for the children's health care needs, regardless

of whether an adjustment in the amount of child support is

necessary. In no event shall the eligibility for or receipt of Medicaid be considered to meet the need to provide for the child's health care needs in the order.

(e) Timeframes for review and adjustment. (1) In any case in which support rights are assigned to the State under õ301.1 of this part, the State must determine, within 15 calendar days of

October 13, 1993 or the date the child support order is 36 months old, whichever date occurs later, whether a review should be conducted, as required under paragraph (c)(4) of this section. Subsequent determinations about whether to conduct a review must be made in accordance with paragraph (c)(4) of this section, at

36-month intervals based upon the date the child support order was adjusted or the date an order was entered determining that the child support order should not be adjusted, or, in any case in which a petition or motion for adjustment was not filed

following a review, the date upon which the post-review challenge period ended.

(2) Within 15 calendar days of receipt of a request for a review, the State must determine whether a review should be conducted, as required under paragraph (c)(4) of this section.

(3) Within 180 calendar days of determining that a review should be conducted or locating the non-requesting parent, whichever ocurs later, a State must:

(i) Send the notice or serve process required under paragraph (c)(6) of this section that a review will be conducted;

(ii) Conduct a review of the order;

(iii) Send the notice of the proposed adjustment or determination that there should be no adjustment as required under paragraph (c)(7) of this section; and

(iv) Adjust the order or determine that the order should not be adjusted in accordance with paragraph (c)(8) of this section.

(f) Interstate review and adjustment. Effective October 13, 1993, or such earlier date the State may select:

(1) Initiating State responsibilities. The State in which a request for review is made, or in which there is an assignment of rights to support, as defined under õ301.1 of this part, must:

(i) In any case in which support rights are assigned to the State under õ301.1, determine, within 15 calendar days of October 13, 1993, or the date the child support order is 36 months old, whichever date occurs later, whether a review should be conducted, as required under paragraph (c)(4) of this section, and in which State a review and adjustment will be sought. Subsequent determinations about whether to conduct a review must be made in accordance with paragraph (c)(4) of this section, at 36-month intervals based upon the date the child support order was adjusted or the date an order was entered determining that the child support order should not be adjusted, or, in any case in which a petition or motion for adjustment was not filed following a review, the date upon which the post-review challenge period ended.

(ii) Within 15 calendar days of receipt of a request for a review, determine whether a review should be conducted, as

required under paragraph (c)(4) of this section, and in which

State a review and adjustment will be sought.

(iii) If the State determines under paragraph (f)(1)(i) or paragraph (f)(1)(ii) of this section that it should review a child support order in effect in the State, the State shall,

within the 180-calendar-day timeframe for review and adjustment

of child support orders set forth in paragraph (e)(2) of this

section, send the notice that a review will be conducted to each parent, conduct a review, provide notice to the parties of the

right to challenge the proposed adjustment or other

determination, and adjust the order or determine that the order

should not be adjusted, in accordance with paragraphs (c)(6) through (8) of this section.

(iv) If the State determines under paragraph (f)(1)(i) or

paragraph (f)(1)(ii) of this section to request a review of a

child support order in another State, send a request for review

to that State within 20 calendar days of receipt of sufficient

information to conduct the review and provide that State with

sufficient information on the requestor to act on the request, in accordance with the requirements of õ303.7(b)(6) of this part.

(v) If the request for review is the first contact between the

initiating and responding States in the case, send the request

for review to the interstate central registry in the responding

State. However, if the initiating State has previously referred the case to a responding State for action and determines under

paragraph (f)(1)(i) or paragraph (f)(1)(ii) that the child support order should be reviewed in that responding

State, the request for review may be sent directly to the

appropriate agency in the responding State for processing.

(vi) Send, to the parent in the initiating State, a copy of any notice issued by a responding State in connection with the review and adjustment of an order, within 5 working days of receipt of

such notice in the initiating State.

(2) Responding State responsibilities. (i) Within 15 calendar

days of receipt of a request for review of a child support order in the responding State, the appropriate processing agency in the responding State must determine whether a review should be

conducted, in accordance with paragraph (c)(4) of this section

and the responding State's procedures for review and adjustment

of child support orders.

(ii) Within 180 calendar days of determining that a review

should be conducted or locating the non-requesting parent,

whichever occurs later, the responding State must send the notice that a review will be conducted to each parent, conduct a review, adjust the order or determine that the order should not be

adjusted, and provide the notice of the adjustment or

determination and the right to challenge the adjustment or

determination in accordance with paragraphs (c)(6) through (8) ofthis section.

(iii) The State may meet the notice requirements of õ303.7(c)(8) of this part by sending the notices of the review required under

paragraphs (c)(6) and (c)(7) of this section to the parent in the initiating State through the IV-D agency in the initiating State.

(3) Applicable laws and procedures. The applicable laws and

procedures for review and adjustment of child support orders,

including the State guidelines for setting child support awards, established in accordance with õ302.56 of this chapter, are those of the State in which the review and adjustment, or determination

that there be no adjustment, take place.